Can Moody's (MCO) Keep Its Beat Streak Alive In Q4 Earnings?
Zacks Investment Research | Feb 10, 2020 10:49PM ET
Moody's Corporation (NYSE:MCO) is scheduled to report fourth-quarter 2019 earnings on Feb 12, before market open. The credit rating company’s quarterly results surpassed the Zacks Consensus Estimate in the last three reported quarters. In fact, shares of Moody's, which have soared 64.5% over a year, have outperformed the broader S&P 500 index’s rise of 20.3%.
Factors That Could Drive the MCO Stock
Moody’s, which is one of the only three chief debt rating agencies in the world, had a string of favorable factors perking up its shares through last year.
First, the low-rate environment created by the Federal Reserve in 2019 boosted credit rating agencies. The central bank cut its benchmark rates thrice last year with the rates now in a 1.5-1.75% range. As the Fed implemented its rate reductions amid geopolitical concerns, more companies gained confidence to issue more debt.
This not only lifted Moody’s revenues throughout the first three quarters of last year but might have also aided its top line in the fourth quarter. Thus, revenues in the Corporate Finance line of the company, the largest revenue provider at the Moody's Investors Service division, are expected to have risen for the period to be reported.
In the quarter ended December 2019, there was a minor improvement in issuance volumes of investment grade bond and leveraged loan while that of high yield bond was highly strong. (Zacks Investment Research
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