Fitch Revises Moody's Outlook to Positive, Cites Strong Financials and Analytics Growth

Fitch Ratings has revised its outlook on Moody's Corporation (NYSE:MCO) to Positive from Stable, while affirming the company's Long-Term Issuer Default Rating at 'BBB+'. The move signals a greater likelihood of a future credit rating upgrade and reflects Fitch's confidence in Moody's financial strength and strategic direction.

Rationale for the Revision

The Positive outlook is underpinned by several key factors, according to the ratings agency. Fitch cited Moody's dominant market position as a leading global credit rating agency, its increased scale, and a track record of sustained and expanding free cash flow.

The agency also emphasized the growing importance of Moody's diversification into non-ratings revenue streams. The Moody's Analytics division, which provides substantial recurring revenue, now accounts for more than 40% of the company's total revenue, supporting a more stable credit profile.

Financial Health and Projections

Fitch noted Moody's strong balance sheet and consistent financial policies. The company ended 2025 with a conservative EBITDA leverage of 1.7x and maintains significant liquidity, including:

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• More than $2 billion of cash on its balance sheet
• An undrawn revolving credit facility
• A $1 billion commercial paper program

Looking ahead, Fitch's rating assumptions project that Moody's will maintain EBITDA margins above 50% and keep EBITDA leverage below 2.0x. The agency expects the company to continue returning significant capital to shareholders through dividends and share repurchases while maintaining stable credit metrics.

Path to an Upgrade

A potential upgrade to Moody's credit rating could occur if the company continues its growth trajectory while preserving its strong profit margins and free cash flow profile, Fitch stated. The agency's affirmation also included Moody's Short-Term IDR and commercial paper ratings at 'F1'.