Is This Warren Buffett Stock a Buy After Q2 Earnings Beat?

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Moodys Corporation Nyheter

Berkshire Hathaway B,Berkshire Hathaway Inc Class A

Stocks Analysis by ValueWalk (Dave Kovaleski) covering: Moodys Corporation, Berkshire Hathaway B, Berkshire Hathaway Inc Class A. Read ValueWalk (Dave Kovaleski)'s latest article on Investing.com

The credit ratings agency is one of Warren Buffett's longest-held stocksThe leading credit ratings agency beat consensus revenue and earnings estimates and had strong year-over-year gains in the quarter. Revenue climbed 22% year-over-year to $1.8 billion while net income soared 46% to $552 million, or $3.03 per share.

Once investors looked at Moody’s Q2 numbers, they were pleased with the results as the stock moved higher.portfolio and he has owned it since 2000. There are only two stocks that he has held longer, Coca-Cola , and Fitch Ratings — and the barrier for entry is extremely high, so it is unlikely to see any new competitors emerge any time soon.

But what also makes Moody’s such a great company is that it has a secondary business called Moody’s Analytics, where it is one of the leaders in providing organizations and institutional investors with market data, analysis, and intelligence. This is a fast-growing business that often surges when markets are down, providing excellent balance alongside MIS, which typically thrives when markets are up.

Its outlook for EPS is also higher, now in a range of $9.95 to $10.35 per share, up from a $9.55 to $10.15 per share range. In addition, it raised its guidance for free cash flow to $2.0 billion to $2.2 billion, from $1.9 billion to $2.1 billion.Moody’s is not cheap, with a P/E ratio of 49 and a forward P/E of 41. Its valuation is as high as it has been since 2016, so investors should keep an eye on that.

 

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