Analyst Note| Rajiv Bhatia, CFA |
MSCI is off to a good start in 2021 with strong first-quarter financial results. Revenue of $478 million topped the FactSet consensus of $472 million. Adjusted EBITDA of $277 million was a touch above the consensus estimate of $274 million. Adjusted earnings per share of $2.46 beat the consensus by $0.21, and we’d attribute the bulk of the earnings beat to a lower-than-expected tax rate. Retention of 96.3% was strong and improved from 95.0% in the year-ago period with improvements in Analytics and ESG & Climate. MSCI did tweak its adjusted EBITDA expense guidance higher to $795 million-$825 million from $780 million-$800 million as it continues to invest in the business, a move that makes sense in our view. Following the strong quarter, we are maintaining our wide moat rating on MSCI and expect to increase our fair value estimate to $286 from $270 per share.