MSCI Issues Below-Consensus Full-Year Guidance Despite Strong Q4 Earnings
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 23h ago
0mins
Source: seekingalpha
- Below-Consensus Guidance: MSCI projects FY26 free cash flow between $1.47B and $1.53B, trailing the $1.60B Visible Alpha estimate, indicating potential growth challenges ahead.
- Strong Q4 Performance: Q4 adjusted EPS of $4.66 exceeded the $4.58 expectation and increased from previous quarters, yet operating revenue of $822.5M slightly missed the $823.7M forecast, reflecting market demand uncertainties.
- Growing Subscription Revenue: Recurring subscription revenues reached $584.2M in Q4, up from $579.1M in the prior quarter with a 7.5% year-over-year growth, demonstrating stability in the customer base.
- Rising Operating Expenses: Total operating expenses increased to $358.9M from $345.7M in Q3, indicating higher spending on expansion and operations, which may impact future profit margins.
Discover Tomorrow's Bullish Stocks Today
Receive free daily stock recommendations and professional analysis to optimize your portfolio's potential.
Sign up now to unlock expert insights and stay one step ahead of the market trends.
Analyst Views on MSCI
Wall Street analysts forecast MSCI stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for MSCI is 648.88 USD with a low forecast of 570.00 USD and a high forecast of 710.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
9 Analyst Rating
7 Buy
2 Hold
0 Sell
Strong Buy
Current: 581.750
Low
570.00
Averages
648.88
High
710.00
Current: 581.750
Low
570.00
Averages
648.88
High
710.00
About MSCI
MSCI Inc. (MSCI) is a provider of critical decision support tools and solutions for the global investment community. The Company operates through four segments: Index, Analytics, ESG and Climate, and All Other-Private Assets. The Index segment offers products, such as MSCI Global Equity Indexes, ESG and Climate Indexes, Factor Indexes, Thematic Indexes, Client-Designed Indexes, Fixed Income Indexes and Real Assets Indexes. The Analytics segment offers risk management, performance attribution and portfolio management content, applications and services. Its ESG and Climate segment offerings include MSCI ESG Ratings, MSCI ESG Business Involvement Screening Research, and MSCI Climate Solutions. The Company's All Other-Private Assets segment comprises the Real Assets segment and Private Capital Solutions segment. The Real Assets segment offers data, benchmarks, return-analytics, climate assessments and market insights for tangible assets such as real estate and infrastructure.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
MSCI to Announce Q4 Earnings on January 28
- Earnings Announcement: MSCI is set to release its Q4 2023 earnings report on January 28 before market open, with a consensus EPS estimate of $4.58, reflecting a 9.6% year-over-year growth, indicating sustained profitability.
- Revenue Expectations: The anticipated revenue for Q4 is $823.7 million, representing a 10.8% year-over-year increase, which underscores MSCI's ability to achieve stable revenue growth amid strong market demand.
- Historical Performance: Over the past two years, MSCI has beaten EPS estimates 100% of the time and revenue estimates 63% of the time, demonstrating the company's reliability in financial forecasting and market confidence.
- Estimate Revision Dynamics: In the last three months, EPS estimates have seen 8 upward revisions and 3 downward revisions, while revenue estimates have experienced 5 upward and 5 downward revisions, indicating some volatility in market expectations regarding the company's future performance.
Continue Reading
Mixed Close for US Stocks as Chipmakers Rally
- Chipmaker Strength: ASML reported record Q4 bookings of €13.2 billion, significantly exceeding the consensus of €6.85 billion, which boosted chipmakers and AI infrastructure stocks, enhancing market confidence in AI spending sustainability.
- Fed Policy Unchanged: The FOMC maintained the interest rate at 3.50%-3.75% as expected, with Chair Powell indicating strong economic performance without signaling imminent rate cuts, keeping market focus on future policy directions.
- Dollar and Gold Fluctuations: The dollar index rebounded after hitting a nearly four-year low, while President Trump's comments on dollar weakness pushed gold prices up over 3% to a new all-time high, reflecting increased demand for safe-haven assets.
- Economic Data Expectations: Initial jobless claims are expected to rise by 5,000 to 205,000 this week, and Q3 nonfarm productivity is anticipated to remain at 4.9%, indicating ongoing economic growth and potential market volatility.
Continue Reading