Moody's Trades at 37 Times Earnings Ahead of July 22 Report; Analyst Questions Premium Valuation
Moody's (NYSE: MCO) is trading at 37 times trailing earnings, above the S&P 500's 32 times, ahead of its second-quarter earnings report on July 22, 2026. The stock has remained nearly flat year-to-date, underperforming the broader market. The company, a near-duopoly player with S&P Global in financial data and credit ratings, expects high single-digit revenue growth for 2026, with adjusted operating margins expanding to 52%-53% and adjusted EPS rising 10%-14%. Moody's is investing in AI features integrated with Amazon Web Services and Microsoft Copilot. However, potential interest rate hikes in the second half of 2026 could pressure its credit rating services for new debt issuances. The article advises waiting for the earnings report to assess macro commentary and AI monetization before buying, citing elevated valuations as a risk.
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