Moody’s Earnings: Ratings Segment Shines in Quarter but Only Small Tweaks to Full-Year Outlook

Moody’s reported a very good start to 2024 with first-quarter revenue growing 21% and rating revenue growing 35%. EBITDA margins also showed strong expansion with firmwide EBITDA margins expanding to 50.7% from 44.6% and ratings EBITDA margins expanding to 64.6% from 56.8%. However, similar to S&P Global, Moody’s believes there is significant pull-forward bond issuance, that is issuance occurring in the first quarter rather than later in the year. As a result, Moody’s did not adjust its full-year outlook much. As we tweak our model, we expect to raise our fair value estimate of $345 by a single-digit percentage to reflect slightly stronger bond issuance than our previous model.