Moody’s Trades at 37 Times Earnings Ahead of Its July 22 Report.
Is the Wide-Moat Ratings Giant Worth the Premium?
Moody’s (NYSE: MCO), one of the largest providers of financial data, analytics, and credit rating services in the U.S., is often considered an evergreen stock. It shares a near-duopoly in the financial data market with S&P Global (NYSE: SPGI), and both companies serve a broad range of businesses and financial institutions. However, Moody’s stock has stayed nearly flat year to date, underperforming the S&P 500’s 9% gain.
It also looks historically expensive at 37 times its trailing earnings, while the S&P 500 trades at 32 times earnings. Should you still invest in Moody’s before its second-quarter earnings report on July 22, or should you wait for it to cool off to more reasonable valuations? What is Moody’s stock treading water?