Moody's MCO is scheduled to announce second-quarter 2026 results on July 22, before the opening bell. The company’s Corporate Finance line, the largest revenue contributor at the Moody's Investors Service (“MIS”) division, is expected to have witnessed robust revenue growth in the to-be-reported quarter.
The company is expected to have benefited from robust investment-grade bond issuance during the second quarter, driven by issuers taking advantage of favorable funding conditions and continued AI-related capital spending by large technology companies. Healthy high-yield bond issuance and a pickup in merger and acquisition financing activities are also likely to have supported ratings demand.
While leveraged loan issuance remained relatively subdued, the strength in investment-grade and high-yield debt issuance is expected to have more than offset this weakness. The Zacks Consensus Estimate for revenues in the Corporate Finance line for the second quarter is pegged at $594 million, indicating a 16% rise from the prior-year quarter.
Coming to Structured Finance, Moody’s is expected to have benefited from robust collateralized debt obligation (CLO) issuance and healthy asset-backed securities (ABS) volumes, supported by resilient leveraged loan activity and steady consumer securitizations. Although commercial mortgage-backed securities (CMBS) issuance remained weak due to elevated interest rates and persistent commercial real estate headwinds, strength in CLO and ABS is likely to have more than offset the softness. As such, the Zacks Consensus Estimate for Structured Finance revenues is pegged at $146 million, indicating 8.1% year-over-year growth.
The consensus estimate for revenues from the Financial Institutions business line of $212 million suggests a year-over-year increase of 11%. The Zacks Consensus Estimate for Public, Project and Infrastructure Finance business revenues of $189 million implies a 16.7% rise.
The Zacks Consensus Estimate for total revenues in the MIS division of $1.20 billion implies a 13.4% year-over-year rise.
Other Factors to Influence MCO’s Q2 Earnings
Moody's Analytics (“MA”) Division: With the demand for analytics rising, revenues from all units at the MA division are expected to have increased in the second quarter. The company’s efforts to strengthen the division’s profitability through inorganic growth strategies are anticipated to have offered support. Thus, the division’s overall revenues are likely to have risen in the to-be-reported quarter.
The consensus estimate for the MA division’s quarterly revenues is pegged at $934 million, indicating 4.8% growth from the prior-year quarter.
Expenses: Given Moody’s inorganic growth efforts, costs related to acquisitions and restructuring are expected to have increased in the to-be-reported quarter, resulting in an increase in total expenses.
Earnings Whispers for Moody’s
According to our proven model, the chances of MCO beating the Zacks Consensus Estimate for earnings this time are high. This is because it has the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better.
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Moody’s is +1.36%.
Zacks Rank: The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Q2 Earnings & Sales Expectations for MCO
The Zacks Consensus Estimate for earnings is pegged at $4.23, which has been unchanged over the past seven days. The figure indicates an 18.8% rise from the year-ago reported number.
Moody's Corporation Price and EPS Surprise
Moody's Corporation price-eps-surprise | Moody's Corporation Quote
The consensus estimate for sales of $2.09 billion suggests a 10% year-over-year rise.
Performance & Expectations of MCO’s Peers
Accenture plc ACN reported third-quarter fiscal 2026 earnings of $3.80 per share, beating the Zacks Consensus Estimate by 2.7%. The metric increased 9% from the year-ago quarter.
ACN’s revenues of $18.72 billion missed the consensus mark by 0.4% but rose 6% year over year in U.S. dollars and 3% in local currency. Managed services, EMEA and communications, media, and technology aided top-line growth. New bookings totaled $19.32 billion, down 2% year over year in U.S. dollars and 3% in local currency.
S&P Global Inc. SPGI is scheduled to report second-quarter 2026 results on July 28.
Over the past seven days, the Zacks Consensus Estimate for S&P Global’s quarterly earnings has been revised lower to $4.88. The estimated figure indicates 10.2% growth from the prior-year quarter’s actual.
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This article originally published on Zacks Investment Research (zacks.com).