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    A Look At Moody's (MCO) Valuation After Recent Share Price Weakness

    Simply Wall St·03/23/2026 12:08:58
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    Moody's stock snapshot after recent trading moves

    Moody's (MCO) is drawing fresh attention after recent trading left the shares around US$435 at the last close, with returns mixed over the past week, month and past 3 months.

    See our latest analysis for Moody's.

    At around US$435, the recent 90 day share price return of a 15.57% decline and year to date share price return of a 12.80% decline contrast with a 3 year total shareholder return of 52.12%. This suggests longer term holders have still seen solid gains despite recent weaker momentum.

    If Moody's recent pullback has you thinking about where else returns could come from, this can be a good moment to broaden your search and uncover 20 top founder-led companies

    Between recent share price weakness, a slight premium to some intrinsic estimates, and a sizeable gap to analyst targets, the key question now is simple: is Moody's undervalued, or is the market already pricing in its future growth?

    Most Popular Narrative: 21.1% Undervalued

    According to the most followed narrative, Moody's fair value of $551.41 sits well above the last close at $435.12, which is a sizable gap the market has yet to close.

    📈 Moody's has established itself as one of the global standards in credit ratings, a status reflected in its wide economic moat and consequently stellar operating margins in the 45 to 50% range. The company consistently generates returns on invested capital roughly 5x its cost of capital, a strong signal of disciplined and effective capital allocation by management. Moody's also actively returns capital to shareholders through buybacks, steadily increasing ownership concentration. Its balance sheet is equally impressive, the interest coverage ratio is so robust that Moody's own estimated debt rating would sit at Aaa, comparing it to similar companies.

    Read the complete narrative.

    The narrative leans heavily on rich margins, high returns on capital and steady capital returns to shareholders. Curious which growth and profitability assumptions have to hold together to justify that fair value gap.

    Result: Fair Value of $551.41 (UNDERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    However, this hinges on trust in US rating agencies remaining intact, and on AI tools not eroding the value clients place on Moody's premium data and analytics.

    Find out about the key risks to this Moody's narrative.

    Another angle on valuation

    While the user narrative points to a fair value of $551.41 and a 21.1% discount, the ratio view sends a different signal. Moody's current P/E of 31.5x is richer than the estimated fair ratio of 17.5x, the Capital Markets industry at 28.6x and peers at 27.6x, which points to higher valuation risk if sentiment cools.

    For a closer look at how these earnings multiples stack up across the sector, and what that gap could mean for future repricing, See what the numbers say about this price — find out in our valuation breakdown.

    NYSE:MCO P/E Ratio as at Mar 2026
    NYSE:MCO P/E Ratio as at Mar 2026

    Next Steps

    With mixed signals on value and quality running through this story, it makes sense to look at the full picture yourself and act quickly on your own view by weighing up the 3 key rewards and 2 important warning signs

    Looking for more investment ideas?

    If Moody's has sharpened your thinking, do not stop here. Use the Simply Wall St screener to hunt for stocks that better match your goals and risk comfort.

    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.