Moody’s Corp.’s stock (MCO) experienced a significant increase of 3.3% following an impressive performance in the third quarter, where the company exceeded its earnings and revenue targets. This success can be attributed to a revival in debt issuance.
Exceeding Expectations
During the quarter, Moody’s reported earnings of $2.43 per share, surpassing the FactSet consensus estimate of $2.30 per share. Furthermore, revenue witnessed a growth of 13% to reach $1.472 billion, slightly exceeding the estimated amount of $1.461 billion.
Positive Outlook for 2023
Looking ahead, Moody’s has projected adjusted earnings for 2023 to range between $9.75 and $10.25 per share, while the FactSet consensus estimate stands at $9.99 per share. This forecast displays the company’s confidence in maintaining its upward trajectory.
Driving Factors
Moody’s highlighted that leveraged finance revenue, particularly from bank loans, experienced its strongest quarter since the beginning of 2022. Additionally, the company revised its 2023 forecasts, indicating growth in bond issuance within the low-to-mid-single digits percentage range. It also expects a notable increase of approximately 40% in high-yield bonds. However, structured finance deals are anticipated to decrease by 25% in 2023.
Market Response
Despite Moody’s positive performance, the Financial Select Sector SPDR Fund (XLF) declined by 0.5%. However, this should not dampen the overall optimism surrounding Moody’s Corp.’s promising future.
Overall, Moody’s Corp. has exhibited exceptional performance in the third quarter, surpassing expectations and demonstrating strong potential for future growth.