Moody’s initiated with a Neutral at Mizuho

Mizuho initiated coverage of Moody’s (MCO) with a Neutral rating and $504 price target. The credit rating agencies are among the highest-quality businesses with stable long-term growth rates, “strong moats, and enduring pricing power,” the analyst tells investors in a research note. The firm prefers S&P Global (SPGI) over Moody’s as it expects the “relative premium to converge closer to historical levels.” Moody’s has traded at an average 2% premium versus S&P but in recent years, the premium has widened and is now at about 13%, Mizuho points out. It believes S&P’s less exposure to the more volatile ratings business should help drive re-convergence of the relative premium closer to historical levels.