Moody's has recently published its Q1-2011 report, boasting exceptional business performance: significant year-on-year revenue growth across all segments and subsegments, improving margins and superior EPS growth. Analyst consensus and our own expectations were significantly below the reported results and thus an update to the initial report is required to reflect this new information.


Our previous valuation indicated a fair price of $32.53 per share with a Buy rating. Moody's stock price has since grown to about $38 per share, while sector valuation multiples have declined at the same time. We estimate that the company should be valued at around $36.93-$38.09 per share (the smaller number includes the effect of a $500 million potential litigation charge we assumed, as in the original report), and assign a Neutral/Hold opinion to the company's stock.

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