Moody’s Corporation is among “big three” rating firms, with Fitch and Standard and Poor’s. The company provides credit rating and related research, data and analytical tools, quantitative credit risk measures, risk scoring software, and credit portfolio management solutions and securities pricing software and valuation models.

In 2011, the company recorded revenues at $2,280 million whit EBIT of $888 million. Since 2010 first quarter, Moody’s quarterly revenues have always outperformed other two ratings agencies. We can find the same dynamic for full year revenues since 2009, according to JP Morgan data. On 26th April the company will release its first quarter earnings; Thomson Reuters’ estimates forecast earnings per share of $0.69 with year over year growth about 3%. Valuation seems correct, in fact the stock is trading 16 and 14.5 times 2012 and 2013 earnings per share estimates.

Graphically, the share is in accumulation phases between USD 43 and USD 41, setting up a specific technical pattern known as flag. This configuration is bullish signal and could boost the share towards USD 48, repeating the same acceleration of last March. In weekly data the share is bullish trend supported by 20 periods moving average.
For both reason, fundamental and technical, we suggest to take a long position immediately with a first target price of USD 48 and a stop loss below USD 41 in order to cover the position.