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Moody's (MCO) to Gain on Decent Bond Issuances in Q3 Earnings
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Moody's (MCO - Free Report) is scheduled to report third-quarter 2021 results on Oct 28, 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 decent revenues in the to-be-reported quarter.
Lower interest rates kept supporting debt issuances in the quarter. Though global investment-grade bond issuance volumes and high-yield bond issuance volumes witnessed year-over-year declines in the quarter; leveraged loan volumes recorded robust growth. The Zacks Consensus Estimate for revenues from the Corporate Finance line is pegged at $447 million, which indicates a 3% fall from the prior-year quarter’s reported number.
The quarterly issuance volumes for residential mortgage-backed securities, asset-backed securities and collateral debt obligation were impressive. Thus, growth in Structured Finance revenues is likely to have been solid. The consensus estimate for the same stands at $126 million, suggesting a 43.2% jump on a year-over-year basis.
The consensus estimate for revenues for the Financial Institutions business line of $144 million implies 7.5% growth. The Zacks Consensus Estimate for Public, Project and Infrastructure Finance business of $125 million suggests a 6% year-over-year decline.
The consensus estimate for the MIS division’s revenues of $837 million indicates a rise of 1.5% from the prior-year quarter’s reported number.
Other Key Factors at Play
Support From 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 third quarter. The company’s efforts to strengthen the division’s profitability through inorganic growth strategies are anticipated to have offered some support as well. Thus, the division’s overall revenues are expected to have risen in the to-be-reported quarter.
The consensus estimate for the division’s revenues of $593 million suggests 11.7% growth from the prior-year quarter’s reported figure.
High 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. Hence, overall expenses are likely to have been elevated.
Key Development During the Quarter
In September, Moody's closed the acquisition of RMS, a pioneer in providing climate and natural disaster risk modeling and analytics. The $2-billion deal, which was announced in August, will fortify Moody’s insurance data and analytics business to nearly $500 million in revenues.
Earnings Whispers
Our quantitative model predicts an earnings beat for Moody’s in the third quarter of 2021. 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: The Earnings ESP for Moody’s is +0.94%.
Zacks Rank: The company currently carries a Zacks Rank #3.
The Zacks Consensus Estimate for the company’s third-quarter earnings is pegged at $2.52, which has moved marginally higher over the past seven days. The figure indicates a decline of 6.3% from the year-ago reported number.
The consensus estimate for sales of $1.45 billion suggests a 6.9% year-over-year increase.
Here are some 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 around:
Civista Bancshares, Inc. (CIVB - Free Report) is scheduled to release results on Oct 27. The company currently carries a Zacks Rank #2 (Buy) and has an Earnings ESP of +5.32%.
Hilltop Holdings Inc. (HTH - Free Report) is scheduled to report quarterly results on Oct 28. The company currently has an Earnings ESP of +3.31% and a Zacks Rank of 2.
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Moody's (MCO) to Gain on Decent Bond Issuances in Q3 Earnings
Moody's (MCO - Free Report) is scheduled to report third-quarter 2021 results on Oct 28, 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 decent revenues in the to-be-reported quarter.
Lower interest rates kept supporting debt issuances in the quarter. Though global investment-grade bond issuance volumes and high-yield bond issuance volumes witnessed year-over-year declines in the quarter; leveraged loan volumes recorded robust growth. The Zacks Consensus Estimate for revenues from the Corporate Finance line is pegged at $447 million, which indicates a 3% fall from the prior-year quarter’s reported number.
The quarterly issuance volumes for residential mortgage-backed securities, asset-backed securities and collateral debt obligation were impressive. Thus, growth in Structured Finance revenues is likely to have been solid. The consensus estimate for the same stands at $126 million, suggesting a 43.2% jump on a year-over-year basis.
The consensus estimate for revenues for the Financial Institutions business line of $144 million implies 7.5% growth. The Zacks Consensus Estimate for Public, Project and Infrastructure Finance business of $125 million suggests a 6% year-over-year decline.
The consensus estimate for the MIS division’s revenues of $837 million indicates a rise of 1.5% from the prior-year quarter’s reported number.
Other Key Factors at Play
Support From 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 third quarter. The company’s efforts to strengthen the division’s profitability through inorganic growth strategies are anticipated to have offered some support as well. Thus, the division’s overall revenues are expected to have risen in the to-be-reported quarter.
The consensus estimate for the division’s revenues of $593 million suggests 11.7% growth from the prior-year quarter’s reported figure.
High 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. Hence, overall expenses are likely to have been elevated.
Key Development During the Quarter
In September, Moody's closed the acquisition of RMS, a pioneer in providing climate and natural disaster risk modeling and analytics. The $2-billion deal, which was announced in August, will fortify Moody’s insurance data and analytics business to nearly $500 million in revenues.
Earnings Whispers
Our quantitative model predicts an earnings beat for Moody’s in the third quarter of 2021. 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: The Earnings ESP for Moody’s is +0.94%.
Zacks Rank: The company currently carries a Zacks Rank #3.
The Zacks Consensus Estimate for the company’s third-quarter earnings is pegged at $2.52, which has moved marginally higher over the past seven days. The figure indicates a decline of 6.3% from the year-ago reported number.
The consensus estimate for sales of $1.45 billion suggests a 6.9% year-over-year increase.
Moody's Corporation Price and EPS Surprise
Moody's Corporation price-eps-surprise | Moody's Corporation Quote
Other Stocks Worth a Look
Here are some 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 around:
Civista Bancshares, Inc. (CIVB - Free Report) is scheduled to release results on Oct 27. The company currently carries a Zacks Rank #2 (Buy) and has an Earnings ESP of +5.32%.
Prosperity Bancshares, Inc. (PB - Free Report) is also scheduled to release earnings on Oct 27. The company, which carries a Zacks Rank #3 at present, has an Earnings ESP of +0.06%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hilltop Holdings Inc. (HTH - Free Report) is scheduled to report quarterly results on Oct 28. The company currently has an Earnings ESP of +3.31% and a Zacks Rank of 2.