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S&P Global’s price target was raised to $425.00 from $406.00, while Moody’s price target was raised to $362.00 from $349.00. Outperform rating was reiterated for both companies.
Despite weak April issuance, improved May and June issuance is anticipated to support a recovery trend. “We had previously expected that SPGI/MCO’s Ratings revenues would deliver low- to mid-single-digit growth in 2Q, but currently estimate that growth could be high-single-digit, above the down 1% that consensus expects,” said Oppenheimer.
Furthermore, despite the Federal Reserve’s indication of potential rate hikes this year, the equity markets experienced a quarter-over-quarter increase of approximately 7% in Q2. This upward trend in the markets provides an additional boost to S&P Global’s earnings.
“That said, SPGI and MCO are up 17% and 22% YTD, respectively. We would be opportunistic in the near term and wait for pullbacks, but remain confident in the long-term prospects for both,” added Oppenheimer.
