MCO
Moody's Corporation
$449.12
Platform & Compounding FCF
70%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 39.3% above fair value
You pay
$449.12
Bear
$233.62
Fair
$322.51
Bull
$408.95
Bear
$233.62
-48.0%
6% stage 1 growth, 12% discount
Fair
$322.51
-28.2%
10% stage 1 growth, 12% discount
Bull
$408.95
-8.9%
13% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (10% base case)
Terminal Value % of EV
34%
Implied Market Multiple
34.7x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $544.75 from 32 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $322.51 per share.
Warnings
Wall Street's average price target is $544.75 (from 32 analysts). Our estimate is 58% 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