Moody's Corporation (MCO): A Bull Case Theory

We came across a bullish thesis on Moody’s Corporation (MCO) on Substack by LongTermValue Research. In this article, we will summarize the bulls’ thesis on MCO. Moody’s Corporation (MCO)'s share was trading at $470.89 as of April 2^nd. MCO’s trailing and forward P/E were 41.82 and 33.56 respectively according to Yahoo Finance.

Moody’s (MCO) has emerged as an intriguing opportunity amid recent market volatility and growing concerns about a potential U.S. recession. With an enterprise value of $84 billion and a market cap of $79.5 billion, the company operates as a dominant player in the information services sector, focusing on credit ratings, research, and risk analysis. Moody’s credit ratings serve as a critical pillar of the financial system, providing essential insights into debt issuers and instruments, while its analytics division offers valuable data and research to corporations. The company’s strong pricing power and oligopoly status make it a resilient choice in uncertain economic environments. Trading at a 17% discount from its 30-day high and all-time high, Moody’s presents an attractive opportunity for investors seeking to upgrade their portfolios with high-quality, defensive businesses. While its 2025 and 2026 P/E multiples of 31.3x and 27.9x suggest a premium valuation, its projected 12% EPS growth in 2026 and a PEG ratio of ~2.2x reinforce its long-term appeal. Despite widespread investor recognition of its strengths, a further pullback to a 25x P/E would offer an even more compelling entry point. As a toll-road monopoly on the financial system, Moody’s remains a standout name for long-term investors.

Moody’s Corporation (MCO) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 91 hedge fund portfolios held MCO at the end of the fourth quarter which was 67 in the previous quarter. While we acknowledge the risk and potential of MCO as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MCO but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.