Decent Global Bond Issuance Volumes to Aid Moody's Q1 Earnings
Moody'sMCO is scheduled to announce first-quarter 2026 results on April 22, before the opening bell. The company’s Corporate Finance line, the largest revenue contributor at the Moody's Investors Service (“MIS”) division, is expected to have witnessed decent revenue growth.
In the first quarter, global bond issuance activity was healthy, while widening credit spreads in March because of the Middle East conflict acted as a dampener to some extent. During the quarter, riskier issuance products like high-yield and leveraged loans were slightly affected by widening credit spreads.
Among the two sub-categories within non-financial corporate bonds, investment-grade loans experienced a solid year-over-year increase in volumes, while high-yield issuance volumes remained healthy. On the other hand, leveraged loan issuance was muted compared with record levels in the year-ago period. The Zacks Consensus Estimate for revenues in the Corporate Finance line of $622.8 million indicates a 10.4% rise from the prior-year quarter.
The consensus estimate for revenues from the Financial Institutions business line of $194.3 million suggests a year-over-year increase of 1.8%, as bank and insurance issuances face a tough comparison against record levels in the prior-year period. The Zacks Consensus Estimate for Public, Project and Infrastructure Finance business revenues of $160.7 million implies a 1.4% fall.
Coming to structured finance, quarterly issuance volumes for collateral debt obligations and asset-backed securities were decent, while commercial mortgage-backed securities issuance volumes were weak. Hence, Structured Finance revenues are likely to have risen. The consensus estimate for the same stands at $156.9 million, suggesting a 13.7% increase.
The Zacks Consensus Estimate for the MIS division revenues for the to-be-reported quarter of $1.22 billion implies a 9.4% year-over-year rise.
Other Factors to Influence MCO’s Q1 Earnings
Moody's Analytics (“MA”) Division: With the demand for analytics steadily rising, revenues from all units at the MA division are expected to have increased in the first 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 likely to have risen in the to-be-reported quarter.
The consensus estimate for the MA division’s quarterly revenues is pegged at $916.4 million, indicating 7.6% growth from the prior-year quarter.
Expenses: Given Moody’s inorganic growth efforts, costs related to acquisitions and restructuring are expected to have increased in the to-be-reported quarter, resulting in an increase in total expenses.
Earnings Whispers for Moody’s
According to our proven model, the chances of MCO beating the Zacks Consensus Estimate for earnings this time are high. 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 are reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Moody’s is +0.37%.
Zacks Rank: The company currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Q1 Earnings & Sales Expectations for MCO
The Zacks Consensus Estimate for earnings is pegged at $4.25, which has been revised 3.2% lower over the past seven days. The figure indicates a 11% jump from the year-ago reported number.
Moody's Corporation Price and EPS Surprise
Moody's Corporation price-eps-surprise | Moody's Corporation Quote
The consensus estimate for sales of $2.07 billion suggests a 7.7% rise.
Performance & Expectations of MCO’s Peers
Accenture plc ACN reported impressive second-quarter fiscal 2026 results, wherein earnings and revenues surpassed the Zacks Consensus Estimates.
ACN’s earnings were $2.93 per share, beating the Zacks Consensus Estimate by 2.5%. The metric increased 3.9% from the year-ago quarter. Total revenues of $18 billion beat the consensus estimate by 1.2% and rose 8.3% on a year-over-year basis.
S&P Global Inc.SPGI is scheduled to report first-quarter 2026 results on April 28.
Over the past seven days, the Zacks Consensus Estimate for S&P Global’s quarterly earnings has been revised lower to $4.82. The estimated figure indicates 10.3% growth from the prior-year quarter.
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