We got here throughout a bullish thesis on Moody’s Company on World Fairness Briefing’s Substack by Ray Myers. On this article, we are going to summarize the bulls’ thesis on MCO. Moody’s Company’s share was buying and selling at $481.65 as of June 25th. MCO’s trailing and ahead P/E have been 41.63 and 36.23 respectively in response to Yahoo Finance.
A detailed up of a portfolio of quite a lot of funding grade company bonds.
Moody’s holds a near-monopoly within the world credit score scores and monetary threat evaluation trade, positioning itself as a necessary infrastructure supplier to the world’s capital markets. Famend for its credit score scores, threat analytics, and determination instruments, the corporate performs a essential position in serving to governments, traders, and monetary establishments consider creditworthiness and allocate capital.
Moody’s providers are usually not solely deeply embedded within the monetary system however are sometimes mandated by regulators, reinforcing its indispensability. The enterprise mannequin is constructed on high-margin, subscription-based choices which can be tough to displace, guaranteeing sturdy pricing energy and recurring income visibility. With over $2 billion in annual earnings, the corporate reinvests in acquisitions and innovation to broaden its moat and broaden its world presence.
This disciplined capital allocation has allowed Moody’s to scale whereas sustaining profitability and defending its core enterprise. The secular development of worldwide financialization, particularly in underpenetrated rising markets, gives an extended development runway as these areas progressively modernize and undertake strong credit score methods. Regardless of the rise of different information suppliers and regulatory scrutiny, Moody’s dominant market share, entrenched shopper relationships, and mission-critical merchandise supply sturdy aggressive benefits.
The corporate’s potential to measure and standardize threat stays important in more and more complicated world markets, positioning it as a beneficiary of structural developments in credit score and finance. Given its resilient enterprise mannequin, steady money flows, and vital limitations to entry, Moody’s is poised to stay a foundational pressure in finance for many years to come back, providing traders each defensive power and long-term development potential.
Beforehand we lined a bullish thesis on Moody’s Company by Peter Thomason in Could 2025, which highlighted its scores oligopoly, high-margin mannequin, and rising analytics enterprise. The inventory has appreciated ~2% since, because the thesis has performed out. The thesis nonetheless stands as Moody’s moat holds agency. Ray Myers shares an identical view however focuses on its world infrastructure relevance.
