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Solid Bond Issuance Volume to Aid Moody's (MCO) Q1 Earnings
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Moody's (MCO - Free Report) is scheduled to report first-quarter 2020 results on Apr 30, 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 recorded higher revenues owing to solid bond issuance volume.
Lower interest rates supported debt issuances in the to-be-reported quarter amid coronavirus concerns. During the quarter, it witnessed an improvement in investment grade bond, leveraged loan, and high yield bond issuance volumes. While solid leveraged loan and high yield bond issuances were seen in the first two months of the quarter, a substantial rise in investment grade bond issuances was witnessed in the last few days of March. Thus, Corporate Finance revenues are expected to have increased year over year.
While the quarterly issuance volume for residential mortgage-backed securities was healthy, asset backed securities issuance volumes were muted. Thus, growth in Structured Finance revenues is likely to have been weak.
Hence, the MIS division’s top line is expected to have recorded a year-over-year improvement. The Zacks Consensus Estimate for the division’s revenues is $771 million, suggesting a 15.1% year-over-year increase.
Other Factors at Play
Support from Moody's Analytics (“MA”) Division: With demand for analytics rising, revenues from all three business units at the MA division are likely to have increased in the first quarter. Also, the company’s efforts to strengthen the division’s profitability through inorganic growth initiatives might have offered some support.
Thus, the division’s overall revenues might have risen in the to-be-reported quarter. The consensus estimate for revenues in the MA division is pegged at $512 million, indicating 8.5% year-over-year growth.
Higher Expenses: Given Moody’s inorganic growth efforts, charges related to strategic acquisition and restructuring costs are likely to have increased in the to-be-reported quarter. Hence, overall expenses for the first quarter are likely to have been elevated.
Earnings and Sales Growth Expectations
The Zacks Consensus Estimate for earnings of $2.29 for the to-be-reported quarter has moved marginally upward over the past seven days. The figure indicates year-over-year growth of 10.6%. The consensus estimate for sales of $1.22 billion suggests a 6.9% year-over-year rise.
Earnings Whispers
Our quantitative model predicts an earnings beat for Moody’s this time around. This is because it has the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP for Moody’s is +0.18%.
Zacks Rank: Moody’s currently carries a Zacks Rank #3.
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 in their upcoming releases.
First BanCorp. (FBP - Free Report) is slated to report quarterly earnings on Apr 30. The company, which carries a Zacks Rank of 3 at present, has an Earnings ESP of +8.51%.
The Earnings ESP for Credit Acceptance Corporation (CACC - Free Report) is +9.53% and it carries a Zacks Rank of 3, currently. The company is likely to announce quarterly numbers soon.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
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Solid Bond Issuance Volume to Aid Moody's (MCO) Q1 Earnings
Moody's (MCO - Free Report) is scheduled to report first-quarter 2020 results on Apr 30, 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 recorded higher revenues owing to solid bond issuance volume.
Lower interest rates supported debt issuances in the to-be-reported quarter amid coronavirus concerns. During the quarter, it witnessed an improvement in investment grade bond, leveraged loan, and high yield bond issuance volumes. While solid leveraged loan and high yield bond issuances were seen in the first two months of the quarter, a substantial rise in investment grade bond issuances was witnessed in the last few days of March. Thus, Corporate Finance revenues are expected to have increased year over year.
While the quarterly issuance volume for residential mortgage-backed securities was healthy, asset backed securities issuance volumes were muted. Thus, growth in Structured Finance revenues is likely to have been weak.
Hence, the MIS division’s top line is expected to have recorded a year-over-year improvement. The Zacks Consensus Estimate for the division’s revenues is $771 million, suggesting a 15.1% year-over-year increase.
Other Factors at Play
Support from Moody's Analytics (“MA”) Division: With demand for analytics rising, revenues from all three business units at the MA division are likely to have increased in the first quarter. Also, the company’s efforts to strengthen the division’s profitability through inorganic growth initiatives might have offered some support.
Thus, the division’s overall revenues might have risen in the to-be-reported quarter. The consensus estimate for revenues in the MA division is pegged at $512 million, indicating 8.5% year-over-year growth.
Higher Expenses: Given Moody’s inorganic growth efforts, charges related to strategic acquisition and restructuring costs are likely to have increased in the to-be-reported quarter. Hence, overall expenses for the first quarter are likely to have been elevated.
Earnings and Sales Growth Expectations
The Zacks Consensus Estimate for earnings of $2.29 for the to-be-reported quarter has moved marginally upward over the past seven days. The figure indicates year-over-year growth of 10.6%. The consensus estimate for sales of $1.22 billion suggests a 6.9% year-over-year rise.
Earnings Whispers
Our quantitative model predicts an earnings beat for Moody’s this time around. This is because it has the right combination of the two key ingredients — a positive Earnings ESP and Zacks Rank #3 (Hold) or higher.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Earnings ESP for Moody’s is +0.18%.
Zacks Rank: Moody’s currently carries a Zacks Rank #3.
Moody's Corporation Price and EPS Surprise
Moody's Corporation price-eps-surprise | Moody's Corporation Quote
Other Stocks to Consider
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 in their upcoming releases.
Boston Private Financial Holdings, Inc. is scheduled to release quarterly results on Apr 29. The company currently has an Earnings ESP of +1.54% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
First BanCorp. (FBP - Free Report) is slated to report quarterly earnings on Apr 30. The company, which carries a Zacks Rank of 3 at present, has an Earnings ESP of +8.51%.
The Earnings ESP for Credit Acceptance Corporation (CACC - Free Report) is +9.53% and it carries a Zacks Rank of 3, currently. The company is likely to announce quarterly numbers soon.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>