Moody's Corp
XMUN:DUT
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Moody's Corp
XMUN:DUT
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Economic Moat
Moody's has a wide economic moat
Borrowers pay for Moody’s ratings because investors trust and use them, making a cheaper, less accepted rating a poor substitute. Its risk-management software also becomes part of customers’ daily work, making replacement costly and disruptive.
What protects Moody's from competitors
Intangible Assets
Moody’s established reputation and regulatory recognition make its ratings valuable to borrowers seeking investor acceptance. That acceptance supports pricing power against less established agencies, which cannot quickly reproduce its record of assessing credit risk.
High Switching Costs
Banks and insurers build Moody’s data and models into lending, risk assessment and reporting processes. Replacing these tools can require rebuilding connections, checking replacement models and retraining staff, making a cheaper rival costly to adopt; this is an inference from the products’ integration and the company’s reported switching costs.
What could weaken Moody's's moat
2 risks to watch
One for each source of the moat: what could happen and how it would weaken it
Peer Comparison
4 of 6 peers have a wide moat.
S&P Global SPGI
Wide
Network Effects, High Switching Costs, Intangible Assets
Intercontinental Exchange ICE
Wide
Network Effects, High Switching Costs, Intangible Assets
Thomson Reuters TRI
Wide
High Switching Costs, Intangible Assets
MSCI MSCI
Wide
Network Effects, High Switching Costs, Intangible Assets
Relx REL
Narrow
Network Effects, High Switching Costs, Intangible Assets
Factset Research Systems FDS
No Moat
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