Moody’s forecasts upbeat 2026 profit on strong demand for credit ratings

Feb 18 (Reuters) – Moody’s forecast annual profit above estimates on Wednesday, betting on sustained demand for its credit ratings amid surging debt issuance.

Shares of the company rose about 2% in premarket trading.

The bond market has seen a pickup in activity, especially as tech heavyweights ramp up issuance to fund their investments in artificial intelligence infrastructure, buoying demand for credit ratings and driving growth at firms like Moody’s.

Its MIS arm, which provides credit rating services, reported a 17% rise in fourth-quarter revenue to $946 million.

The strong projection comes just as the ratings agency’s stock was bruised by a rout that extended from software firms to Wall Street brokerages perceived as vulnerable to automation.

Peer S&P’s shares fell sharply earlier this month after it projected a weak annual profit. Moody’s shares have fallen over 17% in 2026 alone.

Some analysts, however, have said these concerns may be overstated and companies like Moody’s could still benefit from a boost in efficiency driven by the technology.

“By scaling decision grade, contextual intelligence that is embedded directly into customer workflows — across our platforms, third party systems, and AI enabled interfaces — we are expanding the ways in which Moody’s remains central to high stakes decision making,” CEO Rob Fauber said.

Moody’s expects full-year adjusted profit per share between $16.40 and $17.00, surpassing analysts’ average expectations of $16.38, according to data compiled by LSEG.

It also beat estimates for adjusted profit in the fourth quarter, posting $3.64 per share, compared with the $3.42 per share that analysts expected.

(Reporting by Utkarsh Shetti in Bengaluru; Editing by Sahal Muhammed)