MSCI (MSCI) recently caught investors’ attention after its performance over the past month saw shares rise by nearly 3%. With steady annual revenue and net income growth, many are watching to see whether this momentum will continue.
See our latest analysis for MSCI.
Momentum around MSCI has been building again, as reflected by its 6.6% share price return over the past 90 days. While its share price is down slightly year-to-date, the company has still delivered a healthy 17% total shareholder return over the last three years. This reminds investors that steady growth can pay off over the long run.
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But after strong returns and solid earnings growth, the real question is whether MSCI’s current price leaves upside on the table or if the market has already factored in all the company’s future potential.
MSCI’s most-followed narrative sets its fair value significantly above the last closing price, highlighting a notable disconnect between market sentiment and analyst models. This contrast draws extra attention to what’s driving that upside, and serves as a springboard for deeper analysis.
Substantial growth in asset-based fee revenue is being driven by surging global flows into ETFs and index-linked products, especially for non-U.S. and international exposures, underscoring persistent structural demand for MSCI’s indices as capital allocators seek globally diversified portfolios, which directly boosts revenue and earnings.
Read the complete narrative.
Want to know the secret behind that ambitious target? The narrative is powered by bold projections about expanding margins and buybacks, but which forecasts truly move the needle? Find out what estimates have investors so bullish, and see the projections the Street is betting on.
Result: Fair Value of $655.06 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, a slowdown in Sustainability products and intensifying competition could limit MSCI’s growth potential and challenge the bullish outlook that is currently priced in.
Find out about the key risks to this MSCI narrative.
Looking at MSCI through the market’s lens, the company trades at a price-to-earnings ratio of 35.8x, which is notably higher than its industry peers (24.4x) and the fair ratio of 16.6x. That premium signals high confidence in future growth, but also raises the stakes. Could expectations be running ahead of reality?