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Decent Global Bond Issuances to Aid Moody's (MCO) Q2 Earnings
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Moody's (MCO - Free Report) is slated to report second-quarter 2023 results on Jul 25, before the opening bell. The company’s Corporate Finance line, the largest revenue contributor at the Moody's Investors Service (“MIS”) division, is likely to have witnessed decent revenue performance in the to-be-reported quarter.
The issuance activity started on a disappointing note close on the heels of the regional banking crisis in mid-March but picked up momentum as the quarter progressed. All three sub-categories within non-financial corporate bonds (investment grade, high yield and leveraged loans) witnessed gains on a year-over-year basis. Likewise, financial institution issuance volume improved.
The Zacks Consensus Estimate for revenues from the Corporate Finance line of $339.5 million indicates a 5.4% rise from the prior-year quarter’s reported number. The consensus estimate for revenues for the Financial Institutions business line of $134.7 million implies 5.2% growth.
The Zacks Consensus Estimate for Public, Project and Infrastructure Finance business of $126.7 million suggests a 3.9% increase.
On the other hand, quarterly issuance volumes for residential mortgage-backed securities, asset-backed securities and collateral debt obligations were notably down. Thus, Structured Finance revenues are likely to have been adversely impacted. The consensus estimate for the same stands at $106.5 million, suggesting a 13.4% decrease.
Thus, The Zacks Consensus Estimate for MIS division revenues of $767.5 million implies 2.5% growth.
Other Factors
Moody's Analytics (“MA”) Division: With demand for analytics rising, revenues from all units at the MA division are expected to have increased in the second quarter. The company’s efforts to strengthen the division’s profitability through inorganic growth strategies are anticipated to have offered some support. Thus, the division’s overall revenues are expected to have risen in the to-be-reported quarter.
The consensus estimate for the MA division’s revenues is pegged at $744.6 million, indicating a 10.1% increase from the prior-year quarter.
Expenses: Given Moody’s inorganic growth efforts, charges related to strategic acquisitions and restructuring costs are expected to have increased in the to-be-reported quarter. Further, inflation is likely to have led to expense growth. Hence, overall expenses might have been elevated.
Earnings Whispers
Our quantitative model indicates an earnings beat for Moody’s for the second quarter. This is because it has the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Moody’s is +2.24%.
Zacks Rank: The company currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for the company’s second-quarter earnings is pegged at $2.23, which has moved 1.8% upward over the past seven days. The figure indicates a marginal rise from the year-ago reported number.
The consensus estimate for sales of $1.46 billion suggests 5.9% year-over-year growth.
Other Finance Stocks Worth a Look
Here are a few other finance stocks that you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this time:
The Earnings ESP for BankUnited (BKU - Free Report) is +1.91% and it carries a Zacks Rank #3 at present. The company is slated to report second-quarter 2023 results on Jul 25.
Over the past 30 days, the Zacks Consensus Estimate for MCO’s quarterly earnings has remained unchanged.
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Decent Global Bond Issuances to Aid Moody's (MCO) Q2 Earnings
Moody's (MCO - Free Report) is slated to report second-quarter 2023 results on Jul 25, before the opening bell. The company’s Corporate Finance line, the largest revenue contributor at the Moody's Investors Service (“MIS”) division, is likely to have witnessed decent revenue performance in the to-be-reported quarter.
The issuance activity started on a disappointing note close on the heels of the regional banking crisis in mid-March but picked up momentum as the quarter progressed. All three sub-categories within non-financial corporate bonds (investment grade, high yield and leveraged loans) witnessed gains on a year-over-year basis. Likewise, financial institution issuance volume improved.
The Zacks Consensus Estimate for revenues from the Corporate Finance line of $339.5 million indicates a 5.4% rise from the prior-year quarter’s reported number. The consensus estimate for revenues for the Financial Institutions business line of $134.7 million implies 5.2% growth.
The Zacks Consensus Estimate for Public, Project and Infrastructure Finance business of $126.7 million suggests a 3.9% increase.
On the other hand, quarterly issuance volumes for residential mortgage-backed securities, asset-backed securities and collateral debt obligations were notably down. Thus, Structured Finance revenues are likely to have been adversely impacted. The consensus estimate for the same stands at $106.5 million, suggesting a 13.4% decrease.
Thus, The Zacks Consensus Estimate for MIS division revenues of $767.5 million implies 2.5% growth.
Other Factors
Moody's Analytics (“MA”) Division: With demand for analytics rising, revenues from all units at the MA division are expected to have increased in the second quarter. The company’s efforts to strengthen the division’s profitability through inorganic growth strategies are anticipated to have offered some support. Thus, the division’s overall revenues are expected to have risen in the to-be-reported quarter.
The consensus estimate for the MA division’s revenues is pegged at $744.6 million, indicating a 10.1% increase from the prior-year quarter.
Expenses: Given Moody’s inorganic growth efforts, charges related to strategic acquisitions and restructuring costs are expected to have increased in the to-be-reported quarter. Further, inflation is likely to have led to expense growth. Hence, overall expenses might have been elevated.
Earnings Whispers
Our quantitative model indicates an earnings beat for Moody’s for the second quarter. This is because it has the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Moody’s is +2.24%.
Zacks Rank: The company currently carries a Zacks Rank #2 (Buy).
Moody's Corporation Price and EPS Surprise
Moody's Corporation price-eps-surprise | Moody's Corporation Quote
The Zacks Consensus Estimate for the company’s second-quarter earnings is pegged at $2.23, which has moved 1.8% upward over the past seven days. The figure indicates a marginal rise from the year-ago reported number.
The consensus estimate for sales of $1.46 billion suggests 5.9% year-over-year growth.
Other Finance Stocks Worth a Look
Here are a few other finance stocks that you may want to consider, as our model shows that these too have the right combination of elements to post an earnings beat this time:
The Earnings ESP for BankUnited (BKU - Free Report) is +1.91% and it carries a Zacks Rank #3 at present. The company is slated to report second-quarter 2023 results on Jul 25.
Over the past 30 days, the Zacks Consensus Estimate for MCO’s quarterly earnings has remained unchanged.
Invesco (IVZ - Free Report) is also scheduled to release second-quarter 2023 earnings on Jul 25. The company, which carries a Zacks Rank #3 at present, has an Earnings ESP of +0.63%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
IVZ’s quarterly earnings estimates have moved 2.6% upward over the past month.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.