Moody’s Corp.’s (MCO) fourth quarter 2010 earnings beat the Zacks Consensus Estimate based on higher revenues that also exceeded expectations. The results reflect strong activity in corporate and financial institution debt markets, largely driven by a high-yield bond and higher bank loan issuance.
Given the company’s strong revenue and earnings trends and moderating regulatory concerns, we have raised our revenue and earnings estimates for 2011. However, weak Structured Finance business and increased expenses remains areas of concern. We believe Moody’s, with its diversified credit research business model and international growth, remains a solid franchise in rating debt instruments.
Over the long term, Moody’s expects to deliver double-digit revenue growth and over 40.0% in operating margin on the back of growing Investor Service and Analytics business. Hence, we upgrade Moody’s to Outperform.
MOODYS CORP (MCO): Free Stock Analysis Report
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