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The Zacks Consensus Estimate for third-quarter earnings dropped by a couple of cents to $3.32 per share in the past 30 days, suggesting a 16.49% year-over-year growth.
The consensus mark for revenues is pegged at $627.91 million, indicating an increase of 12% year over year.
MSCI’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 5.11%.
Let’s see how things have shaped up for the upcoming announcement.
Factors to Note
MSCI’s third-quarter 2023 results are expected to benefit from robust recurring revenues and the increasing uptake of Climate and ESG solutions in the investment process.
The expanding usage of ESG tools bodes well for the company. The retention rate for ESG and Climate tools was 97% in the second quarter of 2023, reflecting strong demand for Ratings, Climate and Screening products.
Our model estimates for ESG and Climate retention rate are pegged at 96.5% for the third quarter of 2023.
MSCI’s focus on expanding into new areas like Wealth Management, Insurers, Derivatives, case funds, broker-dealers and ESG & Climate is expected to have driven growth in its customer base in the to-be-reported quarter.
MSCI’s strengthening portfolio with the addition of solutions like biodiversity screens and insights, as well as multi-horizon climate probability of default, is expected to have driven the top line.
Our model estimates for ESG and Climate operating revenues is pegged at $68.8 million, indicating 19.5% year-over-year growth. The estimate reflects slowing sales on a sequential basis due to ongoing regulatory headwinds in Europe. MSCI has witnessed a slowdown among wealth managers and retail investors in the United States.
Nevertheless, MSCI is riding on the ongoing tech-driven data transformation as it improves the client experience. The partnerships with Microsoft Azure and Google Cloud are noteworthy in this regard.
These factors are expected to have benefited Index and Analytics operating revenues. Our model estimates for Index and Analytics are pegged at $359.5 million and $157.4 million, respectively. On a year-over-year basis, Index and Analytics are estimated to grow 11.6% and 8.6%, respectively.
What Our Model Says
Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
MSCI has an Earnings ESP of -0.05% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are a few companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:
Image: Bigstock
MSCI Scheduled to Report Q3 Earnings: What's in the Cards?
MSCI (MSCI - Free Report) is set to report its third-quarter 2023 results on Oct 31.
The Zacks Consensus Estimate for third-quarter earnings dropped by a couple of cents to $3.32 per share in the past 30 days, suggesting a 16.49% year-over-year growth.
The consensus mark for revenues is pegged at $627.91 million, indicating an increase of 12% year over year.
MSCI’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 5.11%.
MSCI Inc Price and EPS Surprise
MSCI Inc price-eps-surprise | MSCI Inc Quote
Let’s see how things have shaped up for the upcoming announcement.
Factors to Note
MSCI’s third-quarter 2023 results are expected to benefit from robust recurring revenues and the increasing uptake of Climate and ESG solutions in the investment process.
The expanding usage of ESG tools bodes well for the company. The retention rate for ESG and Climate tools was 97% in the second quarter of 2023, reflecting strong demand for Ratings, Climate and Screening products.
Our model estimates for ESG and Climate retention rate are pegged at 96.5% for the third quarter of 2023.
MSCI’s focus on expanding into new areas like Wealth Management, Insurers, Derivatives, case funds, broker-dealers and ESG & Climate is expected to have driven growth in its customer base in the to-be-reported quarter.
MSCI’s strengthening portfolio with the addition of solutions like biodiversity screens and insights, as well as multi-horizon climate probability of default, is expected to have driven the top line.
Our model estimates for ESG and Climate operating revenues is pegged at $68.8 million, indicating 19.5% year-over-year growth. The estimate reflects slowing sales on a sequential basis due to ongoing regulatory headwinds in Europe. MSCI has witnessed a slowdown among wealth managers and retail investors in the United States.
Nevertheless, MSCI is riding on the ongoing tech-driven data transformation as it improves the client experience. The partnerships with Microsoft Azure and Google Cloud are noteworthy in this regard.
These factors are expected to have benefited Index and Analytics operating revenues. Our model estimates for Index and Analytics are pegged at $359.5 million and $157.4 million, respectively. On a year-over-year basis, Index and Analytics are estimated to grow 11.6% and 8.6%, respectively.
What Our Model Says
Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
MSCI has an Earnings ESP of -0.05% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are a few companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:
GoDaddy (GDDY - Free Report) has an Earnings ESP of +8.11% and sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
GoDaddy shares have declined 3.1% year to date. GDDY is set to report its third-quarter 2023 results on Nov 2.
Fastly (FSLY - Free Report) has an Earnings ESP of +17.24% and a Zacks Rank #2(Buy).
Fastly shares have gained 72.8% year to date. FSLY is set to report its third-quarter 2023 results on Nov 1.
Bill Holdings (BILL - Free Report) has an Earnings ESP of +4.42% and a Zacks Rank #3(Hold).
Bill Holdings shares have declined 17.2% year to date. BILL is set to report its first-quarter fiscal 2024 results on Nov 2.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.