MCO
Moody's Corporation
$458.69
Platform & Compounding FCF
70%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 111.7% above fair value
You pay
$458.69
Bear
$165.11
Fair
$216.65
Bull
$264.82
Bear
$165.11
-64.0%
5% stage 1 growth, 12% discount
Fair
$216.65
-52.8%
8% stage 1 growth, 12% discount
Bull
$264.82
-42.3%
11% stage 1 growth, 12% discount
Adjust Assumptions
8.3%
12.0%
3.0%
Key Value Driver
FCF growth rate (8% base case)
Terminal Value % of EV
33%
Implied Market Multiple
33.1x
Market is pricing in (growth)
17.7%
vs 8.3% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (32 analysts)
$536.40
Divergence from AlphaVal
60%
Summary
Using a two-stage FCF DCF with 8% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $216.65 per share.
Warnings
Wall Street's average price target is $536.40 (from 32 analysts). Our estimate is 60% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions