UBS revises target, keeps Neutral
UBS reduced its price target on Moody’s Corp (NYSE:MCO) shares to $490 from $515 on Wednesday, while keeping a Neutral rating. The firm acknowledged that Moody’s shares rallied following a solid quarterly performance and constructive fiscal 2026 guidance, but concluded the stock trades at a steep premium to comparable information services companies.
Performance and guidance drove recent move
UBS pointed to Moody’s outperformance after the company delivered a decent quarter and provided guidance for fiscal 2026 that the bank characterized as solid. In particular, the core ratings business is expected to produce high-single-digit revenue growth under Moody’s guidance, a pace UBS described as stronger than SPGI’s recent performance.
Analytics division and AI exposure
On Moody’s Analytics, UBS said results remain mixed versus the company’s medium-term targets. The analyst noted management has pursued selective divestitures and other measures aimed at positioning the analytics unit for improved growth. UBS also assessed Moody’s as relatively well-positioned against AI-related disruption risk that has pressured parts of the information services sector.
UBS view of the franchise
UBS characterized Moody’s as possibly the cleanest story among information services names today, labeling it a high-quality franchise with a credible growth outlook. The bank emphasized that the ratings business still contains potential upside should capital markets be supportive, but reiterated that the stock’s valuation premium reduces its appeal versus other opportunities within the sector.
Other analyst moves after earnings
Following Moody’s recent fourth-quarter results, which beat analyst expectations and displayed strength across both ratings and analytics segments, BMO Capital revised its stance as well. BMO lowered its price target on Moody’s from $561 to $480 while maintaining a Market Perform rating. At the same time, BMO raised its earnings estimates for the company, citing the strong results and a constructive view on debt issuance activity.
Management outlook
Moody’s management expects low-single-digit percentage growth in 2026, an outlook the company said should drive high-single-digit growth in MIS-rated issuance. Management highlighted favorable mix and pricing dynamics as supporting factors, especially during the first half of the year.
Implications
Analysts’ adjustments and the firm-level assessment from UBS underscore a balance between Moody’s operational strengths and valuation concerns. While earnings and guidance prompted some analysts to lift earnings assumptions, UBS’s valuation-focused move signals that relative price levels remain a decisive factor for recommendations within the information services and financials coverage universe.