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Morningstar’s Analysis

Valuation
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Stewardship

PREMIUM

Relatively Smooth Sailing for MSCI; ESG Continues to Be a Big Focus

Rajiv Bhatia Equity Analyst

Analyst Note

| Rajiv Bhatia |

Wide moat-rated MSCI reported relatively solid third-quarter financial results. Revenue of $425 million were in line with the FactSet consensus of $424 million and expense favorability resulted in adjusted EBITDA of $249 million beating the consensus by 2%. Adjusted EPS of $2.20 handily beat the consensus of $1.81 as the firm’s tax rate came in much lower than expected. Net new sales of $26 million were roughly flat from the year-ago period and the firm’s retention rate dipped slightly to 94.5% from 95%.Though we are tweaking our model, there was little in MSCI’s earnings report that would cause us to materially alter our long-term view of the firm, so we are maintaining our $255 fair value estimate.

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Company Profile

Business Description

MSCI is a leading provider of benchmark indexes and portfolio risk analytics tools primarily utilized by institutional investors around the world. The company's All Country World Index is recognized as the standard for global equity portfolios by institutional investors and consultants. MSCI believes that approximately $12 trillion in assets globally are benchmarked to MSCI indexes. In addition to indexes, the company's analytics segment provides analytical tools, RiskMetrics, and Barra to investors.

Contact
250 Greenwich Street, 49th Floor, 7 World Trade Center
New York, NY, 10007
T +1 212 804-3900
Sector Financial Services
Industry Financial Data & Stock Exchanges
Most Recent Earnings Sep 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 3,545

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