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    Does Moody’s (MCO) Aggressive Buybacks Reveal New Priorities for Its Capital Allocation Strategy?

    Simply Wall St·10/30/2025 07:25:08
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    • Moody's Corporation recently reported its third-quarter 2025 results, recording US$2.01 billion in sales and US$646 million in net income, both higher than the prior year, and affirmed its quarterly dividend while continuing share repurchases.
    • An interesting development is Moody's ongoing investment in its share buyback program, having retired nearly 7% of its shares since 2020, which can have long-term effects on earnings per share and shareholder returns.
    • We'll explore how Moody's strong sales and earnings growth this quarter inform its broader investment narrative amid ongoing buyback activity.

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    Moody's Investment Narrative Recap

    Owning shares in Moody's often comes down to believing in the continued demand for independent credit ratings and advanced analytics, especially as private credit markets grow and regulatory scrutiny increases. The latest strong quarterly results reinforce the company’s earnings stability, but the most immediate catalyst, ongoing growth in private credit, remains unchanged, while the biggest risk continues to be heightened regulation, neither materially affected by this news cycle.

    This quarter’s update on Moody’s share buyback program is especially relevant, given it has retired nearly 7% of its shares since 2020, which can influence earnings per share and bolster shareholder returns at a time when consistency in capital allocation matters to many investors. The additional US$511.94 million spent on buybacks last quarter shows a continued focus on returning value, aligning with recent trends in earnings and margins.

    But in contrast to robust buybacks and profit growth, investors should be alert to the risk of increased regulatory focus on private credit, as...

    Read the full narrative on Moody's (it's free!)

    Moody's is projected to reach $9.0 billion in revenue and $3.0 billion in earnings by 2028. This outlook assumes a 7.3% annual revenue growth rate and a $0.9 billion increase in earnings from the current $2.1 billion.

    Uncover how Moody's forecasts yield a $545.50 fair value, a 16% upside to its current price.

    Exploring Other Perspectives

    MCO Community Fair Values as at Oct 2025
    MCO Community Fair Values as at Oct 2025

    With nine independent fair value estimates from the Simply Wall St Community ranging from US$282.56 to US$545.50, you can see just how widely views on Moody’s valuation vary. As you consider these viewpoints, remember the company’s future may hinge on persistent regulatory attention in its fastest growing segments.

    Explore 9 other fair value estimates on Moody's - why the stock might be worth as much as 16% more than the current price!

    Build Your Own Moody's Narrative

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.