MSCI Reports Strong Q1 Earnings, Elevated Cancels Impact Growth
Investment research firm MSCI released its first-quarter earnings results on Tuesday, showcasing a 14.8% year-over-year surge in revenue to $679.97 million. This growth was driven by higher recurring subscription revenues and asset-based fees. MSCI’s adjusted EPS of $3.52 surpassed the consensus estimate of $3.45, according to data from Benzinga Pro.
MSCI’s Index operating revenues rose by 10.2% Y/Y to $373.9 million, while Analytics operating revenues grew by 11.5% Y/Y to $164 million. ESG and Climate operating revenues also increased by 16.1% Y/Y to $77.9 million.
MSCI’s Chairman and CEO, Henry A. Fernandez, attributed elevated cancels to a concentration of unusual client events, including a large merger among banking clients. However, MSCI does not anticipate this level of cancels to continue.
For fiscal year 2024, MSCI maintained its guidance for operating expenses, capex, and free cash flow. MSCI shares witnessed a decline of 13.4% to close at $446.00 on Tuesday.
Following the earnings announcement, analysts adjusted their price targets for MSCI. Deutsche Bank analyst Faiza Alwy upgraded MSCI from Hold to Buy while lowering the price target from $613 to $569. Morgan Stanley analyst Toni Kaplan maintained an Overweight rating but reduced the price target from $671 to $615.
