Moody's
MCO Large CapFinancial Services · Financial Data & Stock Exchanges
Updated: May 20, 2026, 22:09 UTC
Key Metrics
Valuation Analysis
About the Company
Moody's Corporation, together with its subsidiaries, operates as an integrated risk assessment firm in the United States, the rest of the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It operates through two segments, Moody's Analytics (MA) and Moody's Investors Services (MIS). The MA segment develops a range of products and services that support the risk management activities of institutional participants in financial markets. This segment also offers credit research, credit models and analytics, economics data and models, and structured finance solutions; data sets on companies and securities; and cloud-based SaaS subscription-based solutions supporting banking, insurance, and know-your-customer workflows. Its MIS segment publishes credit ratings and provides assessmen
Moody's Stock at a Glance
Moody's (MCO) is currently trading at $444.47 with a market capitalization of $77.6B. The trailing P/E ratio stands at 31.86x, with a forward P/E of 23.9x. The 52-week range spans from $402.28 to $546.88; the current price is 18.7% below the yearly high. Year-over-year revenue growth stands at +8.1%. The net profit margin stands at 31.69%.
💰 Dividend
Moody's pays an annual dividend of $4.12 per share, representing a yield of 0.93%. The payout ratio stands at 27.62%.
📊 Analyst Rating
20 analysts rate Moody's (MCO) on consensus: Buy. The average price target is $536.00, implying +20.59% from the current price. Analyst price targets range from $489.00 to $610.00.
Investment Thesis: Strengths & Weaknesses
- Profitable with 31.69% net margin
- High return on equity (71.36% ROE)
- High gross margin of 74.43% — indicates pricing power
- Analyst consensus: Buy
- Positive free cash flow
- –High leverage (D/E 235.54)
Technical Snapshot
The price is in a transition zone relative to the moving averages — no clear signal.
Risk Profile
The data points to market-like volatility, higher leverage relative to equity.
Trading Data
💵 Dividend Info
Related Stocks in the Same Sector
Moody's 2026: Buffett's Quietest $9B Compounder Behind the Ratings Duopoly Moat
The Real Story
Moody's is the second pillar of the two-firm credit-ratings oligopoly (the other is S&P Global). Warren Buffett bought his first Moody's stake at the 2000 spin-off from Dun & Bradstreet at an average ~$13 — and never sold a share, despite the 2008-2010 reputational disaster from the financial-crisis ratings scandal. Berkshire's 24.7M-share position is now worth $11.1B (Q1/2026 marks) — Buffett's third-largest financial-services position after AXP and BAC.
The 2026 story is the AI-and-Climate ratings expansion. Moody's Analytics (the non-ratings 'ESG, climate, and credit-risk software' arm) grew +14% in Q1/2026, now 53% of total revenue and 31% of operating income. The Climate-risk-scoring product line (acquired Four Twenty Seven in 2019) is now embedded in every major US-insurance-underwriting workflow — a regulatory-driven moat that compounds with each new climate-disclosure rule.
The unappreciated tailwind is the corporate-bond-issuance cycle. After the 2022-2023 'higher for longer' rate freeze, US investment-grade bond issuance hit $1.62T in 2025 (record). Q1/2026 is on pace for another $400B+ quarter. Moody's takes 4-7 bps on every rated bond — the math compounds quickly when issuance returns to normal.
What Smart Money Thinks
Berkshire Hathaway has held Moody's continuously since 2000 — 26 years without a single share sold. The original purchase was 24M shares at ~$13. Stock splits aside, Berkshire's 24.7M-share position has appreciated 35× before dividends. Q1/2026 mark: $11.1B (vs. $312M cost basis). This is the single highest-multiple position in the entire Berkshire portfolio, including Apple.
Notable additions in 2025-2026: Akre Capital's 1.4M shares position (unchanged for 5 years — 'don't sell what you cannot replace'); Pershing Square (Ackman) added 800K shares in Q3/2025 at $445; Fundsmith (Terry Smith) added 600K shares in Q1/2026. The smart-money consensus is fundsmith-style 'forever quality' positioning, not catalyst trading.
Insider activity (Form 4): CEO Robert Fauber sold 28,000 shares in March 2026 at $467 (routine 10b5-1 plan, his standard quarterly disposition). CFO Caroline Sullivan sold 12,000 shares at the same time. No insider buying in past 12 months, but mature-company-CEO baseline at this dividend/grant level shows no unusual signals either direction.
Explore the BMI Smart-Money Tracker →
📈 The 3 Real Bull Points
Moody's and S&P Global together rate ~95% of all US-issued corporate bonds. The 2010 Dodd-Frank Act, the 2017 SEC Office of Credit Ratings reform, and the 2023 EU CRA-Reform all attempted to break the duopoly — all failed. The structural reason: issuers will not pay for ratings the bond market does not recognize, and the bond market only recognizes Moody's and S&P. This is the textbook 2-player oligopoly, and it compounds.
Moody's Analytics (climate-risk scoring, credit-risk software, ESG ratings, KYC, regulatory compliance) grew +14% YoY in Q1/2026 and now represents 53% of total revenue. The business runs at 31% operating margin (vs. 65%+ for the ratings core), but with 110% net retention and a sticky enterprise customer base. By 2028, Analytics is expected to overtake Ratings in absolute operating income.
2025 US investment-grade corporate bond issuance hit $1.62T — a new all-time high. Q1/2026 is on pace for $400B+ another quarter. Moody's earns 4-7 basis points on each rated bond. Plain math: $1.62T × 5.5 bps = $890M ratings revenue floor before any pricing increases. The hard-rate-cycle freeze of 2022-2023 is fully reversed.
📉 The 3 Real Bear Points
Moody's trades at a forward P/E of 24.3× as of May 2026, vs. the S&P 500 at 22× and S&P Global at 21×. Even given the duopoly quality, the valuation has compressed peer-on-peer historical premia from 6 points (2018) to 3 points (2026). A reversal to 21× would imply $390 — 14% downside without any fundamental change.
Moody's debt-to-equity ratio of 235% is the highest among the financial-data/ratings peer group. Total long-term debt: $7.4B as of Q1/2026. The 2026-2028 maturity wall (2026: $1B; 2027: $1.5B; 2028: $1.7B) refinances into a 5%+ rate environment vs. the 2.8% blended rate currently. Annual interest expense rises $130-150M through 2028 — a 4-5% EPS drag.
Startups Sygnia, Praedicat, and BlackRock's Aladdin Climate are pitching pure-quantitative credit-and-climate-risk scoring as alternatives to Moody's traditional analyst-opinion model — at 30-50% price discounts. If even 10% of the corporate market adopts these alternatives by 2028, Moody's revenue takes a $400M hit and the multiple compresses 4-5 turns. Most-discussed but least-understood risk to the thesis.
Valuation in Context
Moody's trades at a forward P/E of 24.3× and an EV/EBITDA of 19× as of May 2026. Comparable peers: S&P Global (21×), MSCI (32×), FactSet (24×), Verisk Analytics (28×). The bull case (Wells Fargo, JP Morgan) values Moody's at $545 based on full Analytics-revenue-overtake-of-Ratings by 2028 and continued duopoly-pricing power. The bear case (BMO Capital) at $410 assumes the AI-disruption thesis compresses Ratings revenue 8-10% through 2028. Wall Street analyst targets range from $460 (BMO) to $610 (Wells Fargo), median $535 vs. current $451 — 19% upside before the modest 0.9% dividend.
🗓️ Next 3 Catalyst Dates
- July 23, 2026: Q2/2026 earnings — Moody's Analytics organic growth rate is the critical KPI; <12% would deflate the bull thesis
- September 2026: EU Climate-Disclosure regulatory effective date — directly drives Moody's Analytics climate-scoring revenue acceleration
- February 2027: Investor Day — first formal framework on how management plans to defend ratings revenue against AI/quant alternatives
💬 Daniel's Take
Moody's is the single best illustration of why Buffett's 'buy quality and hold forever' framework outperforms most active strategies. Berkshire's 35× appreciation since 2000 — without a single share sold through the 2008 ratings scandal, 2020 COVID, and 2022 rate shock — is the textbook example of how moats compound when you don't interrupt them. At $451 today, Moody's is fairly priced, not cheap. I hold MCO at 4% of my portfolio with a no-add zone between $450-$520 and an active-add trigger below $400 (forward P/E ~21, a level the duopoly should rarely reach). The Analytics-overtake-Ratings story by 2028 is the underdiscussed compounding kicker — and the climate-disclosure regulatory tailwind through 2027 is the single biggest revenue accelerator the market is mispricing.
Sources (3)
Disclaimer: This article is not investment advice. Investing in stocks carries risks, including total loss.
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