Have you evaluated the performance of Costco's (COST - Free Report) international operations during the quarter that concluded in May 2026? Considering the extensive worldwide presence of this warehouse club operator, analyzing the patterns in international revenues is crucial for understanding its financial resilience and potential for growth.
In the current era of a tightly interconnected global economy, the proficiency of a company to penetrate international markets significantly influences its financial health and trajectory of growth. For investors, the key is to grasp how reliant a company is on overseas markets, as this provides insights into the durability of its earnings, its ability to exploit different economic cycles, and its overall growth capabilities.
International market involvement serves as insurance against economic downturns at home and enables engagement with economies that are growing more quickly. Still, this move toward diversification is not without its challenges, as it involves navigating through the fluctuations of currencies, geopolitical threats, and the distinctive nature of various markets.
Upon examining COST's recent quarterly performance, we noticed several interesting patterns in the revenue generated from its international segments, which are commonly analyzed and observed by Wall Street experts.
For the quarter, the company's total revenue amounted to $70.53 billion, experiencing an increase of 11.6% year over year. Next, we'll explore the breakdown of COST's international revenue to understand the importance of its overseas business operations.
A Look into COST's International Revenue StreamsOther International generated $9.68 billion in revenues for the company in the last quarter, constituting 13.7% of the total. This represented a surprise of +1.44% compared to the $9.55 billion projected by Wall Street analysts. Comparatively, in the previous quarter, Other International accounted for $10.38 billion (14.9%), and in the year-ago quarter, it contributed $8.57 billion (13.6%) to the total revenue.
Of the total revenue, $9.41 billion came from Canada during the last fiscal quarter, accounting for 13.3%. This represented a surprise of +0.84% as analysts had expected the region to contribute $9.33 billion to the total revenue. In comparison, the region contributed $9.29 billion, or 13.4%, and $8.32 billion, or 13.2%, to total revenue in the previous and year-ago quarters, respectively.
Projected Revenues in Foreign MarketsThe current fiscal quarter's total revenue for Costco, as projected by Wall Street analysts, is expected to reach $93.89 billion, reflecting an increase of 9% from the same quarter last year. The breakdown of this revenue by foreign region is as follows: Other International is anticipated to contribute 13.8% or $12.94 billion, and Canada 13.9% or $13.08 billion.
For the full year, the company is projected to achieve a total revenue of $300.84 billion, which signifies a rise of 9.3% from the last year. The share of this revenue from various regions is expected to be: Other International at 14% ($42.2 billion), and Canada at 13.5% ($40.55 billion).
Final ThoughtsCostco's reliance on international markets for revenues offers both opportunities and risks. Hence, keeping an eye on its international revenue trends could significantly help forecast the company's prospects.
With the increasing intricacies of global interdependence and geopolitical strife, Wall Street analysts meticulously observe these patterns, especially for companies with an international footprint, to tweak their forecasts of earnings. Importantly, several additional factors, such as a company's domestic market status, also impact these earnings forecasts.
At Zacks, a company's changing earnings outlook is given considerable attention due to its proven, strong influence on a stock's price performance in the near term. The connection here is straightforward and positive: when earnings estimates are revised upward, the stock price generally follows suit, increasing as well.
The Zacks Rank, our proprietary stock rating tool, comes with an externally validated impressive track record. It effectively utilizes shifts in earnings projections to act as a dependable barometer for forecasting short-term stock price trends.
At the moment, Costco has a Zacks Rank #3 (Hold), signifying that its performance may align with the overall market trend in the upcoming period. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> .
A Look at Costco's Recent Stock Price PerformanceOver the preceding four weeks, the stock's value has diminished by 3.4%, against an upturn of 4.6% in the Zacks S&P 500 composite. In parallel, the Zacks Retail-Wholesale sector, which counts Costco among its entities, has depreciated by 6.5%. Over the past three months, the company's shares have seen a decline of 3.1% versus the S&P 500's 11.1% increase. The sector overall has witnessed an increase of 1.5% over the same period.
Costco (COST +0.67%) stock is experiencing a rare dip.
*Stock prices used were the afternoon prices of June 2, 2026. The video was published on June 4, 2026.
Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy. Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.
I could sit here all day, trying to guess what Costco Wholesale (COST +0.67%) might do in the next three years. Or I could take the easy way out and listen to CEO Ron Vachris instead.
The warehouse retailer reported third-quarter results last week, after all. The earnings call should hold plenty of valuable information.
So I jumped in to see what Vachris and his team had to say about Costco's long-term strategy. I was not disappointed. Here are the top takeaways from Costco's sizzling fresh earnings call.
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The $1.50 hot dog lives on Vachris took the CEO seat in January 2024, and investors might wonder if he's tempted to shake things up. Long story short: not where it counts. The pricing philosophy remains what it's been since the era of founder Jim Sinegal: Costco is the first to drop prices, last to raise them.
On the earnings call, management highlighted several cases where Costco cut prices this quarter despite inflationary pressures -- Kirkland Signature crispy wings, golf balls, and king-size sheets all got markdowns amid rising production costs. And yes, they're expanding hot dog production capacity. The $1.50 frank-and-soda combo lives on.
Costco embraces artificial intelligence But Vachris isn't just keeping the lights on. He's pushing Costco into territory his predecessors didn't explore. Arguably, Jim Sinegal and Craig Jelinek didn't have access to the technology that Vachris is leveraging. (Yep, that's Costco's entire CEO history; three names in 43 years.)
Management disclosed that Costco is working with "the leading AI companies" to improve how its products appear in large language model search results. That hyperspecific idea feels obvious in online ad services. It's refreshing to see Costco's leaders try this promising tactic in the retail industry.
And the AI-search optimization project is off to a strong start. Traffic from AI-driven search is still small but growing by triple digits, with the highest conversion rate of any traffic source.
Image source: The Motley Fool.
World domination, one pallet of paper towels at a time Costco is also accelerating its physical footprint. Vachris wants 30-plus new warehouses per year. China, Japan, South Korea, Spain, and France are all in the crosshairs of international expansion prospects. Many of today's highest-volume warehouses are also relocating to lots with more parking space and room for more gas pumps.
The company also wants your impulse purchases to arrive before you've had time to reconsider your online orders. Same-day delivery now averages under 45 minutes in the U.S., and the company just rolled it out in Spain and France. Member satisfaction ratings average 4.8 out of 5. Same-day delivery buyers tend to be Costco's biggest spenders.
Costco in 2029: bigger, smarter, still cheap hot dogs The company keeps growing, both in physical presence and next-era ideas. In 2029, Costco should be larger, smarter about AI, and still firmly planted in its famous low-cost tradition.
So if you ever wondered why Costco's stock trades at richer valuation multiples than Walmart (WMT +0.44%) and BJ's Wholesale Club (BJ +0.12%), there's your answer. Yesteryear's low-cost warehouse is still a retail heavyweight, now with a side of AI-powered brains.
Costco looks expensive at a 48 price-to-earnings ratio and 1.5 price-to-sales multiple. Over the next three years, Vachris gets to show that the low-cost retailer deserves a premium valuation.
Costco Wholesale shares are trending higher. Why is COST stock trading higher? What Triggered Friday’s Market MeltdownThe turbulence was sparked by a hotter-than-expected May jobs report showing 172,000 added nonfarm payrolls, which crushed expectations and reignited fears of aggressive monetary tightening.
As odds of a quarter-point rate hike surged, Treasury yields spiked, with the 10-year rising to 4.54%. This macroeconomic pressure sent the tech-heavy Nasdaq-100 plunging 4.4%, marking its worst daily decline since October 2025, while the broader S&P 500 retreated 2.5%.
The Power Of Costco's Membership-Based RevenueAs one of the heaviest weights in the consumer staples sector, Costco directly absorbed Friday’s defensive bid, and for good reason. The company’s membership-based model generates a near-guaranteed, recurring revenue stream that is largely insulated from economic cycles. Renewal rates consistently hover above 90%, providing the kind of earnings visibility that investors crave in uncertain macro environments.
Costco’s business model also benefits from the “trade-down” effect during periods of consumer stress. As households tighten budgets in response to higher borrowing costs, the warehouse club format, offering bulk goods at discounted prices, becomes increasingly attractive. That dynamic positions Costco as one of the rare retailers that can actually gain market share when the economic outlook darkens.
COST Shares Trade Flat Friday AfternoonCOST Price Action: Costco Wholesale shares were up 0.59% at $978.08 at the time of publication on Friday, according to Benzinga Pro data.
Image: Shutterstock
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Costco has quietly lowered prices on several popular Kirkland Signature items, including products shoppers had previously flagged online as increasingly expensive.
During the company’s most recent earnings call on May 28, executives said the price cuts impacted at least four of its key private-label items, marking a potential relief for consumers as inflation has remained elevated in recent years.
The affected products saw price reductions ranging from roughly $1 to $10 across categories spanning food, home goods and sporting equipment, CFO Gary Millerchip said during the third-quarter 2026 call.
The KS Crispy Wings fell from $16.99 to $14.99. KS Milk Chocolate Almonds dropped from $19.99 to $18.99. KS Golf Balls declined from $32.99 to $29.99, while KS King Size Sheets were reduced from $89.99 to $79.99.
COSTCO REVEALS KIRKLAND SIGNATURE ITEM PRICE CUTS
Customers look over food items at a Costco store in Colchester, Vt., in August 2024. (Robert Nickelsberg/Getty Images / Getty Images)
The wholesale warehouse said the decision was aimed at offering members maximum value while continuing to undercut competitors, as part of its broader pricing strategy.
"Our goal is to be the first to lower prices and last to raise them," CEO Ron Vachris said.
Millerchip reinforced that approach, adding: "Our goal is to be the first to lower prices where we see opportunities to do so."
Ticker Security Last Change Change % COST COSTCO WHOLESALE CORP. 982.35 +6.66 +0.68% According to social media users, shoppers who have long favored Kirkland’s chocolate-covered almonds said the item has become noticeably more expensive over the years in both the U.S. and Canada.
"They’ve become too expensive," one U.S. shopper wrote on Reddit a year ago.
"I love the Kirkland brand 1.5 kg chocolate covered almonds," another Costco shopper in Canada said a year ago. "They used to be $17 then they went to $20. Now they are $27!! "
SPACE HEATERS SOLD AT COSTCO, OTHER MAJOR RETAILERS FOR YEARS RECALLED OVER FIRE HAZARD
A man pushes a cart outside a Costco supermarket in Los Angeles on March 14, 2020. (Xinhua/Qian Weizhong via Getty Images / Getty Images)
Costco Wholesale did not specify what prompted the latest price cuts, but the move follows a previous instance over a year ago when the retailer voluntarily lowered prices on select Kirkland Signature products.
In 2024, the price of KS macadamia nuts fell from $18.99 to $13.99, Spanish olive oil 3-liter from $38.99 to $34.99, standard foil from $31.99 to $29.99, laundry packs from $19.99 to $18.99, and the baguette two-pack from $5.99 to $4.99, Millerchip previously said.
A shopper looks at clothing for sale inside a Costco store in San Francisco on Wednesday, March 3, 2021. ( David Paul Morris/Bloomberg via Getty Images / Getty Images)
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Millerchip added that KS boneless chicken tenders also fell by 13%, resulting in a 21% increase in pounds sold.
"Kirkland Signature offers significant member value compared to the national brands and continues to grow at a faster pace than our business as a whole," Millerchip said.
Fox News Digital's Greg Norman contributed to this report.
Key Takeaways COST posted 21.5% digitally enabled comp growth in Q3 FY26, far above total comps of 9.8%.Costco rolled out digital card access, mobile wallet upgrades, app cake ordering and cart pre-scan.Costco said rec carousels drove 3x conversion and nearly $500M e-commerce sales; AI search traffic surged. Costco Wholesale Corporation’s (COST - Free Report) third-quarter fiscal 2026 results suggest that its digital business is evolving from a supporting channel into a meaningful growth engine. The company reported digitally enabled comparable sales growth of 21.5%, significantly outpacing total comparable sales growth of 9.8%. Adjusted digitally enabled comparable sales rose 20.8%, while site and app traffic jumped 37%, highlighting strong engagement across its digital ecosystem.
The momentum is being driven by more than just online transactions. Management pointed to a series of technology investments that are improving the member experience across both digital and warehouse channels. Enhancements such as digital membership card access, mobile wallet improvements, expanded cake ordering through the Costco app and the international rollout of its shopping cart pre-scan tool are helping simplify shopping and checkout processes.
Costco is also seeing tangible benefits from personalization efforts. In the quarter, personalized product recommendation carousels generated conversion rates three times higher than normal levels and contributed nearly $500 million in e-commerce sales. This indicates that the retailer is becoming more effective at connecting members with relevant products while driving higher digital engagement.
Another emerging opportunity is artificial intelligence. Costco noted triple-digit growth in traffic generated through AI-powered search platforms, with this traffic delivering the highest conversion rates among all sources. While still small today, management views AI-driven discovery as a potentially significant channel for attracting shoppers and highlighting Costco’s value proposition.
How Costco Compares With Walmart and TargetWalmart Inc. (WMT - Free Report) continues to strengthen its digital ecosystem through faster fulfillment, marketplace expansion and AI-powered shopping tools. In the first quarter of fiscal 2027, Walmart reported a 26% increase in global e-commerce sales, driven by store-fulfilled delivery, marketplace growth and advertising services. Marketplace sales in the United States surged 50%, while Walmart highlighted rising engagement with its AI shopping assistant, Sparky and growing membership revenues from Walmart+.
Target Corporation (TGT - Free Report) is also investing in its omnichannel capabilities. In the first quarter of fiscal 2026, Target reported growth across both stores and digital channels, supported by higher traffic and technology investments. Target is enhancing digital merchandising, improving product discoverability and leveraging its stores-as-hubs model, which fulfills more than 95% of sales through stores. As Target accelerates technology initiatives and digital integration, it is aiming to deliver a more seamless shopping experience for guests.
What the Latest Metrics Say About CostcoCostco has seen its shares tumble 3.3% in the past three months compared with the industry’s decline of 1.5%.
Image Source: Zacks Investment Research
From a valuation standpoint, Costco's forward 12-month price-to-earnings ratio stands at 44.22, higher than the industry’s ratio of 31.29. However, it is trading below its 12-month median level of 46.71, indicating some moderation in valuation despite sustained investor confidence in the stock.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for Costco’s current financial-year sales and earnings per share implies year-over-year growth of 9.3% and 13.3%, respectively. For the next fiscal year, the consensus estimate indicates a 7.7% rise in sales and 10.2% growth in earnings.
The consensus estimate for earnings per share for the current and next fiscal year has increased by 6 cents and 7 cents to $20.38 and $22.45, respectively, in the past 30 days.
Image Source: Zacks Investment Research
Costco currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Costco Wholesale (COST +0.67%) have been falling in recent weeks. The retail stock is now down about 11% from its 52-week high of just under $1,097. It's not a huge sell-off by any stretch, but given how strong its gains have been in recent years and how solid a business it has been, it may still make for an enticing option for investors to consider.
On Monday, the stock was trading at around $975. Is it a good buy while it remains below the $1,000 mark?
Image source: Getty Images.
Costco's business has been booming, and it still has much more room to grow Consumers and investors alike love Costco. It's evident in both the company's rising sales and its share price. In five years, the stock has surged around 160%, as the business has been resilient, even though it's not exactly known for being associated with budget-friendly shopping. In fact, people normally break their budgets by spending more than they planned to when going to their local Costco warehouse.
The bargain-hunting business model has, however, worked incredibly well for Costco, enabling the business to grow significantly over the years. In the past three years, its annual revenue has risen from $227 billion to more than $275 billion. And over the trailing 12 months, its top line is now up around $294 billion. Costco has been a growth beast, while focusing mainly on North America; there's still ample room for it to grow internationally. The potential is alluring. The problem with the retail stock, however, is that it isn't cheap.
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Is Costco worth its hefty premium? You might expect retail stocks to trade at low earnings multiples for their modest growth, but Costco investors haven't balked at paying much more. Today, the stock is trading at a price-to-earnings multiple of around 50, which in the past may have seemed ludicrous to pay so much for a retail stock. But that's the kind of premium you'd be paying today, even if you bought it below $1,000.
Costco is a great company, and while there's plenty of value within its warehouses, the same can't be said for its stock. The stock has simply surged so much over the years that its valuation has gotten absurd. Even if you love the business, that doesn't make the stock a good buy. Although its share price has been falling in recent weeks, Costco's valuation would have to come down considerably more for it to be an attractive investment.
Costco Wholesale (COST +0.67%) reported blowout earnings for the 2026 fiscal third quarter (ended May 10). The warehouse retailer is demonstrating accelerating sales growth and is even more popular as consumers seek the best prices amid rising inflation rates.
As outstanding as the report was, it wasn't enough to boost the stock, though, which fell after the results were released. The market's been worried about a slowdown happening as inflation persists, even though the impact so far has only been positive for Costco.
However, it just provided another round of excellent news for Costco shareholders, and the stock is rising again.
Sales are accelerating First, here are some of the highlights in the third quarter:
Sales increased 11.6% over last year. Comparable sales (comps) increased 9.8%. Earnings per share (EPS) were up from $4.28 last year to $4.93 this year.
Image source: Getty Images.
As always, Costco's membership metrics tell a deeper narrative. Membership was up 4.1%, and the adjusted membership fee was up 7%. Renewal rates remained strong at 92.2% in North America and 89.7% worldwide. The worldwide rate has been slightly lower since Costco introduced online registration. However, online registration is also attracting younger members, which is an important development for the company's long-term growth story.
Costco has been embracing digital technology in a number of ways that fit its unique model. It's not set up for classic e-commerce, but it has a robust buy online, in-store pickup business, and it works with third-party platforms for same-day grocery deliveries. Digitally enabled sales have been a key growth driver over the past few months, and sales increased 21.5% year over year in the third quarter.
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Another growth driver has been the company's gas stations. As shoppers search for the lowest prices, customers who don't usually use Costco's pumps have been trying them out. CEO Ron Vachris said, "We believe this will drive even greater loyalty with these members in the future, as members who use our gas stations typically spend more with us in the warehouse."
Costco is one of the few public companies that report select monthly results as well as quarterly numbers, and there was another acceleration in May. Total revenue increased 14.5% over last year, while comps were up 12.5%. The highest comps were domestic, with a 13.7% increase in U.S. comps. These are its best monthly results since late 2021.
Based on the third-quarter commentary, higher oil prices likely play a big role in the acceleration. But based on the same commentary, these customers may continue to fill up at Costco and increase engagement across the business. So while there may be a near-term spike in sales due to what is hopefully a short-term jump in oil prices, there could be lasting benefits for Costco.
Costco Wholesale (COST +0.67%) has historically been an expensive stock to buy. The company is so reliable for top performance that the stock's premium was worth it. However, as it surpassed 60 times trailing 12-month earnings, it was starting to look too pricey.
Indeed, the stock is flat since it hit that high, although it's had ups and downs in the middle.
That P/E ratio may have been a signal for a correction. But at 49 times trailing 12-month earnings, is Costco stock finally cheap enough to buy?
Image source: Getty Images.
Why investors love Costco Costco consistently reports robust growth, and it has some of its best performance when times have been tough. That's what's been happening today.
In the company's 2026 fiscal third quarter (ended May 10), sales increased 11.6% year over year, while comparable sales (comps) were up 9.4%. Despite rising costs, profitability remains strong, with earnings per share (EPS) up from $4.28 to $4.93.
And if that wasn't enough, Costco just reported its May results, which were even better. Revenue increased 14.5% year over year, and comps were up 12.5%. Costco provides only a limited slate of metrics for the monthly reports.
Costco's reliable membership model generates loyalty and volume, and its rock-bottom prices drive higher sales when customers are penny-pinching. It earns its $65 per annual membership fee, or $130 per executive membership, no matter what, providing reliable recurring revenue.
Love can only go so far It's this kind of performance that has investors clamoring for the stock despite the high price. The company is resilient, and the stock is expected to be, too. That theory changes, though, as the valuation climbs, because the high price itself makes it susceptible to a correction. That's what's been happening lately.
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Costco stock is down 13% this year, even as the S&P 500 has hit record highs. At a P/E ratio of 49, it's only slightly lower than the three-year average of 52.
There could be more pressure on Costco stock in the near term, as the market expects volatility going forward as inflation persists. But this could be one of the dips that are likely to occur, so if you have a long-term investing approach and many years to hold, you could feel comfortable buying Costco stock at the current price.
Costco Wholesale (COST +0.67%) investors may be scratching their heads a bit over recent stock price movements following seemingly strong sales and earnings reports.
On June 3, the big-box retailer posted a huge May sales increase, up 14% from last May to $24 billion. Net sales for the first 39 weeks of the fiscal year are up 10% from the same period last year. Comparable store sales rose 12.5% in May and have jumped 8% through the first 39 weeks.
That was boosted by strength in two areas, including digital or online sales, which rose an impressive 21% year over year in May and 21% through the first 39 weeks.
Image source: Getty Images.
The other major spike came from gas sales. Comp sales excluding gas was 8%, so gas sales increases accounted for a third of the comp sales increase.
This followed a robust third-quarter earnings report released on May 29 for the period ended May 10, when comp sales rose 10%, digital sales spiked 21%, and gas sales set a record. Also, earnings shot up 15% to $4.94 per share.
So why has Costco stock been dropping?
Costco stock sputters Typically, reports this strong would be a catalyst for the stock price to rise, but Costco shares have sputtered over the past week. The May sales report (released June 3) temporarily caused a spike as shares jumped from $962 per share to $997 per share when the market opened on June 5. But then shares tumbled back down to close at around $960, down almost 5%.
A big part of that June 5 drop was not related to Costco. There was an overall sell-off that day after a hotter-than-expected jobs report threw cold water on the prospects of a rate cut.
But Costco stock fell more than the broader market as investors are wary of its high valuation and may be taking profits, sensing drawn-out impacts from the Iran war and perhaps no rate-cut relief. Also, despite the blowout results, the overall gross margin dropped 21 basis points as Costco lowered prices on some key items and faced higher costs in areas (like transportation). It led to concerns that too much of the gains came from the temporary spike in gas prices.
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These are all seemingly minor concerns, but when the stock is trading at 49 times earnings and 43 times forward earnings, there is not much room for error. Investors likely saw potential headwinds and decided to take some profits until the valuation drops.
Costco is a great long-term hold, but it's probably a bit overvalued right now to warrant calling it a strong buy.
Dave Kovaleski has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.
Costco is pushing back hard against a proposed class-action lawsuit that accuses the retail giant of misleading shoppers about its popular $5 rotisserie chicken.
In a motion filed last week in the US District Court for the Southern District of California, the warehouse club asked the court to dismiss the case, which was brought in January by two California customers.
The plaintiffs claim Costco’s Kirkland Signature Seasoned Rotisserie Chicken contains carrageenan and sodium phosphate while still being marketed as having “no preservatives.”
A customer pushes a shopping cart past an empty Costco food court with “Item unavailable” signs. Shutterstock / Andriy Blokhin
A large pile of rotisserie chickens with crispy brown skin, stacked in front of an industrial oven. Luiz C. Ribeiro for New York Post
Costco’s legal team fired back, arguing the case rests on a misunderstanding of how the ingredients are classified. Shutterstock / leungchopan According to the lawsuit, that labeling misleads consumers and violates Washington’s Consumer Protection Act, California’s Consumers Legal Remedies Act, and other California statutes.
Costco’s legal team fired back, arguing the case rests on a misunderstanding of how the ingredients are classified.
Attorney Charles Sipos, representing the company, called the false advertising allegations “fatally flawed,” saying the substances in question are not considered preservatives under US Food and Drug Administration regulations.
The warehouse club asked the court to dismiss the case, which was brought in January by two California customers. Shutterstock / Erman Gunes Instead, he said they are used as part of the chicken’s seasoning mix.
Carrageenan, derived from seaweed, is commonly used in processed foods as a thickener and stabilizer.
Sodium phosphate serves multiple functions in food production, including thickening, curing, leavening, and emulsifying.
The lawsuit seeks to stop Costco from advertising the product as free of preservatives and to allow US customers who purchased the chicken to join a class action seeking monetary damages.
The plaintiffs’ attorneys, Almeida Law Group, allege the “no preservatives” claim allowed Costco to charge a premium price. Costco, however, disputes that argument, with Sipos stating in the filing:
“They allege that Costco’s ‘No Preservatives’ statement enabled the company to charge more for Rotisserie Chicken,” he wrote in the motion. “Yet, the Amended Complaint does not identify a single ‘competitor’ who prices a whole rotisserie chicken for sale for less than $4.99.”
Sipos also argued the plaintiffs fail to demonstrate any concrete harm caused by the labeling claims.
Costco (NASDAQ:COST | COST Price Prediction) is structured for multi-decade compounding because its membership fee engine turns a low-margin grocery business into a recurring-revenue compounder that gets stronger every cycle.
If you are in your 50s or 60s and tired of being whipsawed by trend trades, this is the kind of holding you can buy, file away, and let work. The case rests on a structure that pays whether the consumer is panicking, splurging, or somewhere in between.
Pillar 1: A business model designed to outlast you Costco effectively rents access to its warehouses to 82.1 million paying members, then uses bulk-buying power to deliberately undercut local chains so those members feel compelled to keep showing up to “get their money’s worth.” The high-margin, recurring revenue generated by its more than 80 million paying members is the real engine, well beyond the razor-thin margin on bulk goods.
The durability shows up in the renewal data. The worldwide renewal rate sat at 89.7% in the most recent quarter, with U.S. and Canada at 92.1%. Subscription software companies dream about retention like that. Add Kirkland Signature, which CFO Gary Millerchip described as offering “15% to 20% value compared to the national brand alternative with equal or better quality,” and the moat widens every year.
Pillar 2: The high-margin secret weapon that compounds Membership fees compound earnings over time. Fiscal Q3 2026 membership fee income hit $1.37 billion, up 10.7% year over year, on top of $1.355 billion in Q2, which grew 13.6%. That income drops to the bottom line at a far higher rate than retail merchandise. Net income rose 13.81% in Q2 and 15.2% in Q3, while operating cash flow ran at $13.34 billion for fiscal 2025.
For an income-minded retiree, Costco pays a modest quarterly dividend with a per-share annual rate of $5.37, plus a history of special dividends. The yield is small, but the growth rate of the cash funding it is robust.
Pillar 3: Why it survives every cycle Costco trades as a Consumer Defensive name with a beta of 0.868, meaning it tends to move less than the broader market. In inflation, members chase its undercut pricing. In deflation, management leans into lower shelf prices and watches traffic rise. In recessions, the value proposition tightens loyalty rather than loosening it. Traffic still grew 3.1% globally in Q2, and the company plans roughly 30-plus new openings per year for the next decade.
The scenario where it underperforms Costco trades at a trailing P/E of 49 and a forward multiple of 43. In a sharp value rotation, deeper-discount or low-multiple names will beat it for a stretch. Over the past year the stock is down 3.19%. That does not change the thesis, because the membership base, the renewal rate, and the warehouse pipeline keep compounding regardless of what multiple the market is willing to pay this quarter. Over the past five years, shares are up 166.83%.
For long-term investors, Costco’s renewal engine continues to do the heavy lifting regardless of quarterly noise.
Warren Buffett stepped down as CEO of Berkshire Hathaway on December 31, 2025, after six decades leading the conglomerate he transformed from a struggling textile mill into a $1 trillion empire. The “Oracle of Omaha” left his successor, Greg Abel, with a very concentrated portfolio: almost 65% of Berkshire’s $381 billion portfolio is invested in just six stocks. Abel, who has served as vice chair overseeing non-insurance operations, officially took over as CEO on January 1, 2026. At 95 years old, Buffett isn’t fully retiring—he will remain chair of the board and plans to continue coming to the Omaha headquarters as much as before. However, he has stated he will be “going quiet” and leaving all decision-making to Abel. While that is likely the case, it’s a solid bet that four dividend stocks Buffett loves will never be sold.
In his shareholder letters and statements over the years, Buffett has pointed to a handful of holdings as permanent or near-permanent parts of the portfolio. Abel often reiterates these. These are positions that will likely be in the Berkshire Hathaway lineup long after Buffett has gone to the great stock market in the sky. All four are perfect ideas for those seeking to emulate the Berkshire Hathaway portfolio and investment strategy. Here are the qualities that these forever stocks share, and all are rated Buy at the top Wall Street firms we cover:
Durable competitive advantages (moats) Simple, understandable businesses Shareholder-friendly management Ability to thrive across economic cycles Why do we cover Berkshire Hathaway stocks?
Few investors have the results and reputation that Buffett has garnered over the past 60 years. Though he has stepped away from the CEO chair, his impact and investment guidelines are likely to remain in place long after he is gone. While investing has evolved since Buffett took control of Berkshire Hathaway in 1965, buying good companies with products and services recognized worldwide and paying dividends will always remain a timeless approach and never go out of style.
American Express American Express (NYSE: AXP | AXP Price Prediction) is an American bank holding company and multinational financial services corporation specializing in payment cards. This stock has performed well over the past year, offering a dividend yield of 1.07%, and has been part of the Berkshire portfolio since 1993. The company offers products and services to customers worldwide, including consumers, small businesses, mid-sized companies, and large corporations.
Its segments include:
U.S. Consumer Services, which offers travel and lifestyle services, as well as banking and non-card financing products. Commercial Services offers payment, expense management, banking, and non-card financing products. International Card Services provides services to international customers, including travel and lifestyle services, and manages certain international joint ventures and its loyalty coalition business. Global Merchant and Network Services operates a payments network that processes and settles card transactions, acquires merchants, and provides multichannel marketing programs, capabilities, services, and data analytics. Berkshire Hathaway owns 151,610,700 shares, or 22.1% of American Express’s float, and 14.7% of the portfolio.
Truist Financial has a Buy rating with a $360 target price.
Coca-Cola Coca-Cola (NYSE: KO) is the world’s largest beverage company, offering consumers more than 500 sparkling and still brands, and it pays a dependable 2.66% dividend. Berkshire Hathaway owns 400 million shares, which is 9.3% of the float and 9.9% of the portfolio, and has held them since 1988.
With a 63-year streak of dividend increases and a business model built on recurring consumption, Coca-Cola combines defensive characteristics with exposure to emerging market growth. Organic revenue rose 5% in 2025, and the company anticipates 4% to 5% growth in 2026, with analysts projecting adjusted EPS growth of 7% to 8%.
Led by Coca-Cola, one of the world’s most valuable and recognizable brands, the company’s portfolio features 20 billion-dollar brands, including:
Diet Coke Coca-Cola Light Coca-Cola Zero Sugar Caffeine-free Diet Coke Cherry Coke Fanta Orange Fanta Zero Orange Fanta Zero Sugar Fanta Apple Sprite Sprite Zero Sugar Simply Orange Simply Apple Simply Grapefruit Fresca Schweppes Dasani Fuze Tea Glacéau Smartwater Glacéau Vitaminwater Gold Peak Ice Dew Powerade Topo Chico Minute Maid Globally, it is the top provider of sparkling beverages, ready-to-drink coffees, juices, and juice drinks. Through the world’s most extensive beverage distribution system, consumers in more than 200 countries enjoy the company’s beverages at a rate of over 1.9 billion servings per day. The company also owns 16% of Monster Beverage (NASDAQ: MNST), which continues to deliver strong financial results.
Jefferies has a Buy rating and a $90 target price.
Moody’s Moody’s (NYSE: MCO) is a leading global provider of credit ratings, research, and risk analysis. While it isn’t one of Buffett’s more well-known stocks, he first bought shares in 2000, and the stock pays a slight 0.84% dividend. This integrated risk assessment firm operates in two segments.
The Moody’s Analytics segment develops a range of products and services that support the risk management activities of institutional participants in financial markets. It also offers:
Credit Research Credit models and analytics Economics data and models Structured finance solutions Data sets on companies and securities SaaS solutions supporting banking and insurance The Moody’s Investors Service segment publishes credit ratings. It provides assessment services for various debt obligations, programs, and facilities, and for entities that issue such obligations, including corporate, financial institution, and governmental obligations, as well as structured finance securities.
Evercore ISI has an Outperform rating with a $610 price objective.
Occidental Petroleum After years of building this position, Buffett and Berkshire Hathaway are finally in the money on this company, which pays a 1.68% dividend. Occidental Petroleum (NYSE: OXY) is an international energy company with assets primarily in the United States, the Middle East, and North Africa. The company is an oil and gas producer in the United States, including the Permian and DJ basins and the offshore Gulf of America.
Berkshire Hathaway has a large position of 264,941,431 shares, representing 26.7% of the float and 5.6% of the portfolio.
Occidental’s oil and gas segment explores for, develops, and produces oil (including condensate), natural gas liquids (NGLs), and natural gas. The midstream and marketing segment purchases, markets, gathers, processes, transports, and stores oil (including condensate), NGLs, natural gas, carbon dioxide (CO2), and power. This segment provides flow assurance, maximizes the value of its oil and gas, and optimizes the company’s transportation and storage capacity. It also invests in entities that conduct similar activities, including low-carbon venture businesses.
A notable recent development was Occidental’s decision to sell its OxyChem subsidiary to Berkshire Hathaway, with the bulk of the proceeds expected to strengthen the company’s balance sheet and further concentrate its business on oil and gas. The move was especially interesting because Buffett had reportedly long been interested in OxyChem, and Berkshire now owns the business outright. Berkshire Hathaway completed its purchase of OxyChem on January 2, 2026, providing Occidental with $9.7 billion in cash to reduce debt and sharpen its focus on energy.
Mizuho has an Overweight rating and a $72 price objective.
Some financial deals are more than just financial deals. Blackstone (BX +1.58%) Life Sciences' $400 million commitment to Teva Pharmaceutical Industries Ltd. (TEVA +0.20%) in March could be an example.
Blackstone is a giant in the alternative asset management world. Its Blackstone Life Sciences (BXLS) team includes 20 healthcare experts with M.D.s or Ph.Ds. BXLS has invested in over 200 medicines that were eventually commercialized. Its success rate for investing in phase 3 drugs is an impressive 86%.
In a real sense, Blackstone's agreement to fund the development of experimental autoimmune disease drug duvakitug is a bet on Teva's future. What does the "smart money" know that most investors don't?
Image source: Getty Images.
Why was Blackstone willing to pony up $400 million for advancing duvakitug? The drug is highly promising. Duvakitug is a human monoclonal antibody that targets TL1A (tumor necrosis factor-like ligand 1A), a protein that's a key regulatory within the body's immune system.
Teva and its partner, Sanofi (SNY +0.32%), are currently evaluating duvakitug in Phase 3 clinical studies as a potential treatment for ulcerative colitis and Crohn's disease. The companies also announced positive results earlier this year from a Phase 2 study of the drug, which showed durable efficacy over 44 weeks in patients with those autoimmune diseases.
Paris Panayiotopoulos, Senior Managing Director with BXLS, stated in the press release announcing the $400 million financing deal with Teva, "Duvakitug has the potential to be a best-in-class therapy in a large and growing space." He added, "The Teva and Sanofi teams are well positioned to develop and commercialize this important medicine."
BXLS Global Head, Dr. Nicholas Galakatos, also reinforced that the interest wasn't solely in duvakitug's prospects. He stated, "This transaction further demonstrates our focus on partnering with leading biopharmaceutical companies to execute their growth initiatives."
A new and improved Teva The Blackstone investment underscores that Teva is no longer just a middling generic drug maker. The Israel-based company is now a leading biopharmaceutical innovator.
In addition to duvakitug, Teva's pipeline features two other innovative medicines in late-stage testing. Olanzapine long-acting injectable targets schizophrenia. Teva awaits U.S. Food and Drug Administration (FDA) approval for the drug. The company is also evaluating TEV-'248, a dual-action rescue inhaler for the treatment of asthma, in a Phase 3 study.
Teva continues to be a leader in biosimilar development as well. The drugmaker awaits FDA approvals for five biosimilars to successful drugs, including Eylea, Prolia, Simponi, and Xgeva.
Credit ratings agencies are recognizing Teva's turnaround. In December 2025, S&P Global (SPGI +1.52%) upgraded Teva's credit rating to BB+ from BB, with a stable outlook. Moody's (MCO +1.44%) also revised its outlook for Teva to positive from stable.
Wall Street is bullish about the pharma stock, too. Of the 13 analysts surveyed by S&P Global in April who cover Teva, 12 rated the stock as a "buy" or "strong buy." The sole outlier recommended holding Teva.
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Should you follow the smart money? Investors should view Blackstone's $400 million commitment to Teva as a powerful endorsement of duvakitug's commercial potential. Importantly, Blackstone stands to receive milestone payments and low single-digit royalties on worldwide sales of duvakitug if it wins regulatory approval. The alternative asset management company definitely has skin in the game.
But should you follow the smart money by investing in Teva? Risk-averse investors will probably be better off staying away. However, aggressive investors could find a lot to like about Teva. With a forward earnings multiple of only 11.5, there's even a case to be made that Teva is a value stock. If duvakitug succeeds as much as Blackstone expects, Teva could be a big winner for investors.
Taking full advantage of the stock market and investing with confidence are common goals for new and old investors, and Zacks Premium offers many different ways to do both.
The popular research service can help you become a smarter, more self-assured investor, giving you access to daily updates of the Zacks Rank and Zacks Industry Rank, the Zacks #1 Rank List, Equity Research reports, and Premium stock screens.
It also includes access to the Zacks Style Scores.
What are the Zacks Style Scores? Developed alongside the Zacks Rank, the Zacks Style Scores are a group of complementary indicators that help investors pick stocks with the best chances of beating the market over the next 30 days.
Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.
The Style Scores are broken down into four categories:
Value ScoreFinding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and a host of other multiples to highlight the most attractive and discounted stocks.
Growth ScoreWhile good value is important, growth investors are more focused on a company's financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.
Momentum ScoreMomentum trading is all about taking advantage of upward or downward trends in a stock's price or earnings outlook, and these investors live by the saying "the trend is your friend." The Momentum Style Score can pinpoint good times to build a position in a stock, using factors like one-week price change and the monthly percentage change in earnings estimates.
VGM ScoreIf you like to use all three kinds of investing, then the VGM Score is for you. It's a combination of all Style Scores, and is an important indicator to use with the Zacks Rank. The VGM Score rates each stock on their shared weighted styles, narrowing down the companies with the most attractive value, best growth forecast, and most promising momentum.
How Style Scores Work with the Zacks Rank The Zacks Rank is a proprietary stock-rating model that harnesses the power of earnings estimate revisions, or changes to a company's earnings expectations, to help investors build a successful portfolio.
It's highly successful, with #1 (Strong Buy) stocks producing an unmatched +23.93% average annual return since 1988. That's more than double the S&P 500. But because of the large number of stocks we rate, there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.
But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.
That's where the Style Scores come in.
You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only has a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.
As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.
A stock with a #4 (Sell) or #5 (Strong Sell) rating, for instance, even one with Scores of A and B, will still have a declining earnings forecast, and a greater chance its share price will fall too.
Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.
Stock to Watch: Moody's (MCO - Free Report) Moody’s Corporation is a leading provider of credit ratings, research, data & analytical tools, software solutions & related risk management services, quantitative credit assessment services, credit training services and credit process software to banks and other financial institutions.
MCO is a #3 (Hold) on the Zacks Rank, with a VGM Score of B.
Additionally, the company could be a top pick for growth investors. MCO has a Growth Style Score of B, forecasting year-over-year earnings growth of 11.7% for the current fiscal year.
Four analysts revised their earnings estimate upwards in the last 60 days for fiscal 2026. The Zacks Consensus Estimate has increased $0.00 to $16.69 per share. MCO boasts an average earnings surprise of +4.2%.
With a solid Zacks Rank and top-tier Growth and VGM Style Scores, MCO should be on investors' short list.
Investors looking for stocks in the Financial - Miscellaneous Services sector might want to consider either Futu Holdings Limited Sponsored ADR (FUTU - Free Report) or Moody's (MCO - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Currently, Futu Holdings Limited Sponsored ADR has a Zacks Rank of #1 (Strong Buy), while Moody's has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that FUTU has an improving earnings outlook. But this is only part of the picture for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
FUTU currently has a forward P/E ratio of 13.16, while MCO has a forward P/E of 27.24. We also note that FUTU has a PEG ratio of 0.90. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. MCO currently has a PEG ratio of 2.45.
Another notable valuation metric for FUTU is its P/B ratio of 4.25. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, MCO has a P/B of 25.27.
These metrics, and several others, help FUTU earn a Value grade of B, while MCO has been given a Value grade of D.
FUTU sticks out from MCO in both our Zacks Rank and Style Scores models, so value investors will likely feel that FUTU is the better option right now.
Moody's Corporation's ordinary shares have underperformed YTD, but I view AI disruption fears as overstated and see recent weakness as a buying opportunity. The analytics segment's core value lies in proprietary data, expert insights, and regulatory compliance, which AI tools cannot easily replicate or replace. The Investor Services segment has shown robust growth. Tight credit spreads and relatively low real borrowing rates might sustain issuances for an extended period.
On May 13, 2026, we delve into the discounted cash flow (DCF) analysis for Moodys Corp MCO . The company's stock has experienced a mixed performance, with a year-to-date decline of 11.4% and a one-year drop of 6.1%. Below are some key points regarding the DCF valuation:
DCF Earnings-based intrinsic value of $267.91 vs current price of $451.75 (margin of safety: -68.6%) DCF FCF-based intrinsic value of $264.62 vs current price (second opinion: margin of safety -70.7%) GF Score™ of 92/100 indicating high reliability of the DCF inputs What Is MCO Worth? DCF Earnings-Based Model The DCF earnings-based model for Moodys Corp utilizes a two-stage approach, where the first stage reflects a growth phase over the next ten years, followed by a terminal phase. The assumptions used in this model are critical for deriving the intrinsic value.
Parameter Value Current EPS (TTM, excl. non-recurring) $15.45 10-Year Growth Rate 11.2% 10-Year Treasury Rate 4.33% Discount Rate (ceil(Treasury) + 6%) 11% Terminal Growth Rate 4% In the first stage (Years 1-10), we assume an annual EPS growth of 11.2%, which is then discounted at a rate of 11%. In the second stage (Years 11-20), the growth rate slows to a terminal rate of 4%, also discounted at 11%. The calculation summary is as follows:
Stage Description Value Growth Stage (Years 1-10) EPS growing at 11.2%, discounted at 11% $156.04 Terminal Stage (Years 11-20) 4% terminal growth, discounted at 11% $111.87 Intrinsic Value Growth + Terminal $267.91 With the current price at $451.75, the intrinsic value of $267.91 indicates that the stock is modestly overvalued, presenting a margin of safety of -68.6%. It is important to note that GuruFocus uses EPS excluding non-recurring items, as research shows stock prices correlate more closely with earnings than with free cash flow. For further calculations, you can visit the MCO DCF Calculator.
What Does the Free Cash Flow DCF Say? The alternative DCF model based on free cash flow (FCF) yields an intrinsic value of $264.62. When comparing this with the earnings-based intrinsic value of $267.91, both models indicate that Moodys Corp is modestly overvalued, with a margin of safety of -70.7%. This reinforces the conclusion drawn from the earnings-based model.
How Does GF Value™ Compare to the DCF Models? The GF Value™ for Moodys Corp is calculated at $533.91, suggesting that the stock is undervalued by 15.4%. GF Value™ is GuruFocus' proprietary measure derived from historical trading multiples, past business growth, and future performance estimates. While the DCF models indicate that the stock is overvalued, the GF Value™ presents a contrasting perspective, highlighting the importance of considering multiple valuation methods. For more details, visit the GF Value™ page.
What Does MCO's GF Score™ Tell Us? The GF Score™ ranks stocks on a scale from 0 to 100 based on five key aspects: Financial Strength, Profitability, Growth, Valuation, and Momentum. Higher GF Score™ values are associated with better long-term returns, as evidenced by backtesting from 2006 to 2021.
Metric Rating GF Score™ 92/100 Financial Strength 6/10 Profitability 9/10 Growth 9/10 Valuation 10/10 Momentum 5/10 Moodys Corp has a predictability rank of 1 out of 5 stars, indicating that the DCF model may be less reliable for this stock. For more information, visit the MCO stock page.
Key Assumptions and Limitations It is important to note that DCF models are highly sensitive to the assumptions made regarding growth rates and discount rates. Stocks with low predictability ratings, such as Moodys Corp, often yield less reliable DCF estimates. The terminal growth rate of 4% is a simplifying assumption that may not fully capture the company's future performance.
What This Means for Investors In summary, the three valuation models—DCF earnings, DCF FCF, and GF Value™—present a consensus that Moodys Corp is currently overvalued. The intrinsic values derived from both DCF models are significantly lower than the current market price, while GF Value™ suggests a different perspective. Overall, investors should approach with caution. For the full DCF analysis, visit the MCO DCF Calculator. You can also explore the GF Value™ page, or use the GuruFocus Stock Screener to find undervalued predictable companies.
Frequently Asked Questions What is MCO's intrinsic value based on DCF?
Answer: earnings-based $267.91, FCF-based $264.62
Is MCO overvalued or undervalued?
Answer: Both DCF models indicate overvaluation, while GF Value™ suggests undervaluation.
How reliable is the DCF model for MCO?
Answer: The predictability rank is 1 out of 5, indicating lower reliability for the DCF model.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
NEW YORK--(BUSINESS WIRE)--Moody’s Corporation (NYSE: MCO) announced today that Rob Fauber, President and Chief Executive Officer, will speak at the Bernstein Strategic Decisions Conference on Thursday May 28, 2026. The presentation will begin at approximately 4:30 p.m. EDT and will be webcast live. The webcast will be accessible at Moody’s Investor Relations website, ir.moodys.com.
This event is conducted in compliance with Regulation FD. Senior management may use the content made available for this presentation during subsequent meetings with analysts and investors.
ABOUT MOODY'S
In a world shaped by increasingly interconnected risks, Moody’s (NYSE:MCO) data, insights, and innovative technologies help customers develop a holistic view of their world and unlock opportunities. With a rich history of experience in global markets and a diverse workforce of approximately 16,000 across more than 40 countries, Moody’s gives customers the comprehensive perspective needed to act with confidence and thrive.
More News From Moody’s Corporation Investor Relations
On May 18, 2026, Moodys Corp MCO shares rose 3.4% today, bringing the current price to $443.41. The stock has experienced a 52-week range of $402.28 to $546.88, indicating notable volatility over the past year.
GF Value™ verdict: The current price of $443.41 is 17.0% below the GF Value™ estimate of $534.45.GF Score™ of 91/100 indicates a strong overall performance compared to peers.Insiders sold $7.8 million worth of stock in the last three months, suggesting a cautious outlook from those closest to the company. Is MCO Overvalued or Undervalued? The current price of Moodys Corp at $443.41 represents a significant discount compared to its GF Value™ of $534.45, indicating that the stock is undervalued by approximately 17.0%. This margin of safety suggests a potential opportunity for long-term investors, particularly with the GF Valuation label indicating the stock is "Modestly Undervalued." GF Value™ is GuruFocus' proprietary measure of intrinsic value, calculated from historical trading multiples, past business growth, and future performance estimates.
However, investors should be cautious given the recent insider selling of $7.8 million, which may reflect concerns about future performance. Despite the undervaluation, potential investors should consider the underlying financial strength and market conditions before making decisions.
How Does MCO's Valuation Compare to Its History? MetricCurrentHistorical P/E (TTM)31.8x39.9x (5-Year Median) Forward P/E26.5x The current P/E ratio of 31.8x is significantly below its 5-year median of 39.9x, indicating that the stock is trading at a lower valuation compared to its historical average. This analysis agrees with the GF Value™ verdict that suggests MCO is undervalued, providing further support for potential investment consideration.
What Does MCO's GF Score™ Tell Us? MetricRating GF Score™91/100 Financial Strength6/10 Profitability9/10 Growth9/10 Valuation8/10 Momentum5/10 Moodys Corp's GF Score™ of 91/100 indicates a strong overall performance, with particularly high ratings in Profitability (9/10) and Growth (9/10). However, the Financial Strength rating of 6/10 suggests that while the company is performing well in terms of profitability and growth, it may face some challenges in its financial stability. The Momentum rank of 5/10 indicates mixed signals regarding the stock's short-term price movements.
What Are Insiders Doing with MCO Stock? In the last three months, insiders at Moodys Corp sold $7.8 million worth of shares. This selling activity may suggest a cautious approach among those with intimate knowledge of the company's operations and future prospects. The absence of insider buying during this period could indicate a lack of confidence in the stock's short-term outlook, highlighting the importance of considering insider sentiment alongside valuation metrics.
What This Means for Investors Based on the GF Value™ analysis, Moodys Corp is currently undervalued, presenting a potential opportunity for investors. However, caution is warranted due to recent insider selling and mixed signals in financial strength. Investors should weigh these factors carefully when considering their positions in the stock.
For the complete analysis, visit the Moodys Corp MCO stock page. You can also explore the GF Value™ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.
Frequently Asked Questions What is MCO's GF Score™?
MCO's GF Score™ is 91/100, indicating a strong overall performance based on key financial metrics.
Is MCO overvalued or undervalued?
MCO is undervalued with a GF Value™ of $534.45, suggesting a 17.0% upside from the current price of $443.41.
What is MCO's P/E ratio?
The current P/E ratio for MCO is 31.8x, which is significantly below its 5-year median of 39.9x, indicating the stock is trading at a lower valuation compared to its historical averages.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
It has been about a month since the last earnings report for Moody's (MCO - Free Report) . Shares have lost about 1.5% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Moody's due for a breakout? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for Moody's Corporation before we dive into how investors and analysts have reacted as of late.
Moody’s Q1 Earnings Beat on Rising Analytics Demand & Higher IssuancesMoody's reported first-quarter 2026 adjusted earnings of $4.33 per share, which outpaced the Zacks Consensus Estimate of $4.25. The bottom line grew 13% from the year-ago quarter.
The results primarily benefited from an improvement in revenues. Steady demand for analytics and the robust performance of the Moody’s Investors Service segment supported the results. The company’s liquidity position was strong in the quarter. An increase in operating expenses posed a headwind.
After considering certain non-recurring items, net income attributable to Moody's was $661 million, or $3.73 per share, up from $625 million, or $3.46 per share, in the prior-year quarter.
Revenues Improve, Costs RiseQuarterly revenues were $2.08 billion, which surpassed the Zacks Consensus Estimate of $2.07 billion. The top line rose 8% year over year.
Total expenses were $1.16 billion, up 7% year over year.
Adjusted operating income of $1.1 billion rose 11% year over year. The adjusted operating margin was 53.2%, up from 51.7% a year ago.
Strong Quarterly Segment PerformanceMoody’s Investors Service revenues increased 8% year over year to $1.15 billion. The rise was driven by strength in Corporate Finance, Financial Institutions, and Public, Project and Infrastructure Finance revenues, partially offset by lower revenues at Structured Finance.
Moody’s Analytics revenues rose 8% year over year to $928 million. The increase was driven by 7% growth in Decision Solutions, an 8% rise in Research and Insights, and a 10% jump in Data & Information.
Solid Balance SheetAs of March 31, 2026, Moody’s had total cash, cash equivalents and short-term investments of $1.51 billion, down from $2.45 billion as of Dec. 31, 2025.
The company had $6.39 billion in outstanding long-term debt.
Share Repurchase UpdateIn the quarter, MCO repurchased 1.5 million shares.
2026 GuidanceMoody’s expects adjusted earnings in the range of $16.40-$17.00 per share. GAAP earnings are projected to be the band of $16.00-$16.60 per share, up from the prior target of $15.00-$15.60 per share.
Moody’s projects revenues to increase in the high-single-digit percent range.
Operating expenses are expected to be in the mid-single-digit range. Further, non-operating income is projected to be between $70 million and $90 million. Previously, the company expected non-operating expenses of $180-$200 million.
Net interest expenses are estimated to be $220-$240 million, higher than the prior target range of $210-$230 million.
The adjusted operating margin is expected to be 52-53%, while the operating margin is likely to be approximately 45%.
Moody’s expects the cash flow from operations to be $3.25-$3.45 billion. The free cash flow is projected to be in the $2.80-$3 billion range.
The effective tax rate is projected to be 23-25%.
2026 Segment GuidanceMIS segment revenues are expected to increase in the high-single-digit range. The adjusted operating margin is expected to be roughly 65%.
Coming to the MA segment, Moody’s anticipates revenues to rise in the mid-single-digit range, while Annualized Recurring Revenue (ARR) is expected to increase in the high-single-digit range. Further, an adjusted operating margin is expected to be 34-35%.
Strategic and Operational Efficiency Restructuring Program In December 2024, Moody’s CEO approved a Strategic and Operational Efficiency Restructuring Program aimed at improving efficiency and focusing on growth areas. The initiative is expected to generate annual savings of $250–$300 million by consolidating functions, reducing staff, exiting leased office spaces and retiring legacy software. The program involves $170–$200 million in pre-tax personnel-related restructuring charges and an additional $30–$50 million in non-cash charges. It is projected to strengthen operating margins and support strategic investments, with substantial completion by the end of 2026 and related cash outlays (to be between $210-$230 million) continuing through 2027.
How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a downward trend in estimates revision.
VGM ScoresCurrently, Moody's has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of F on the value side, putting it in the bottom 20% quintile for value investors.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
OutlookEstimates have been trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Moody's has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry PlayerMoody's is part of the Zacks Financial - Miscellaneous Services industry. Over the past month, Applied Digital Corporation (APLD - Free Report) , a stock from the same industry, has gained 32.1%. The company reported its results for the quarter ended February 2026 more than a month ago.
Applied Digital Corporation reported revenues of $126.64 million in the last reported quarter, representing a year-over-year change of +139.3%. EPS of -$0.36 for the same period compares with -$0.16 a year ago.
For the current quarter, Applied Digital Corporation is expected to post a loss of $0.13 per share, indicating a change of -8.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -18.2% over the last 30 days.
Applied Digital Corporation has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of F.
Berkshire Hathaway recently revealed its latest portfolio trades, the first with new CEO Greg Abel in charge. It didn't take long for a major shake-up. Berkshire Hathaway had its most active trading quarter in recent memory, entirely selling out of several companies and buying into others.
Given that Buffett still serves as chairman at Berkshire Hathaway, the spirit of his investing philosophy remains. That said, it's clear that management did a thorough review of Berkshire's holdings, and what remains are likely high-conviction holdings for the new leadership group.
Here are five blue chip stocks that remain in the portfolio, and why investors might buy them hand over fist in May.
Image source: Getty Images.
1. Apple Consumer electronics giant Apple (AAPL 1.52%) remains Berkshire Hathaway's top holding. Apple's reluctance to throw billions of dollars at artificial intelligence (AI) now looks like a prudent decision in hindsight, as the company continues to pump out cash flow and profits while partnering with Google on the next generation of Siri, the iOS voice assistant. Apple has also leaned into its hardware strengths, launching the MacBook Neo to compete at the entry level of the PC market.
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Apple is a behemoth at this point, but still has enough growth and monetization levers it can pull that it warrants buying and holding the stock for the foreseeable future. If Apple does eventually take a bold swing in the AI arena, the upside potential would be tremendous given the company's vast global user base of more than 2.5 billion active iOS devices.
2. Moody's The arrival of AI has disrupted companies in various industries throughout the economy. In the financial sector, Moody's (MCO +1.44%) has been among the names that have slipped. Fears have arisen that AI will eventually analyze risk well enough to replace credit ratings. However, that seems unlikely, at least for now, since Moody's ratings are an industry standard, built with proprietary data.
The uncertainty has pressured Moody's stock. Shares have fallen about 35% from their high and now trade at 31 times earnings, their lowest valuation since early 2023. It's a very reasonable price tag for a stock that analysts believe will see underlying earnings grow by 11% annually over the next three to five years. This AI-fueled decline may turn out to be a classic buy-the-dip moment in hindsight.
3. Alphabet Tech and AI conglomerate Alphabet (GOOGL +0.53%)(GOOG +0.45%) is one of the few stocks that Berkshire Hathaway bought in the first quarter, raising its position to 6.8% of its portfolio. Alphabet has become a multifaceted AI stock due to its various AI-infused businesses, including Search, Gemini, Waymo, and its Tensor Processing Unit (TPU) chips for AI cloud workloads.
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Financially, Alphabet is humming. The company continues to show companywide strength, and analysts now see Alphabet growing earnings by more than 16% annually over the next three to five years. That's plenty of growth to justify buying shares at a forward P/E ratio of 27, especially if you're holding the stock while the business catches up with the share price appreciation.
4. American Express One of Buffett's longest-standing favorites is American Express (AXP +2.18%). The iconic lender and payment processor has a fully contained financial ecosystem. It issues cards, processes payments, and lends to card users, giving it full control over its business and its card users. It can offer charge cards and other financial products that competitors may struggle to replicate. It's partially why American Express has established itself as a premium brand for high spenders.
Debt is central to the economy. U.S. households have more than $1.25 trillion in credit card debt. American Express has also done well at winning over young consumers, which bodes well for the future. Wall Street analysts estimate that the company's earnings will grow by nearly 14% annually, making American Express a strong stock to buy and hold.
5. Coca-Cola One last Buffett classic is Coca-Cola (KO +0.11%). It's the only one of these five stocks that's a Dividend King, a company with more than 50 years of consecutive dividend increases, which speaks to the durability of Coca-Cola's global beverage business. You won't mistake Coca-Cola for a growth stock, but that dividend, which currently yields 2.6%, adds up over time as those increases push the payout ever higher.
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The company isn't exactly cheap at almost 25 times earnings. That valuation is a tad high for a company that analysts estimate will grow earnings by 7% to 8% annually over the long term. Still, when it comes to dividend growth stocks such as Coca-Cola, the longer you own the stock, the better, as it gives the dividend more time to compound, especially if you reinvest it.
Warren Buffett is no longer the CEO of his investment vehicle, Berkshire Hathaway (BRKA +0.73%)(BRKB +0.55%), but the celebrated investor is leaving a long shadow. In fact, many of the company's stock positions in its equity portfolio were opened during his long tenure as its leader.
New(ish) CEO Greg Abel has already left his mark on the company as its chief, but the portfolio is still anchored by Buffett-era picks. Of this clutch of stocks, five stand out as investments to own for a lifetime -- American Express (AXP +2.18%), Alphabet (GOOG +0.45%) (GOOGL +0.53%), Apple (AAPL 1.52%), Coca-Cola (KO +0.11%), and Moody's (MCO +1.44%).
Image source: The Motley Fool.
1. American Express Amex is one of Berkshire's earliest and most resounding successes. Buffett pounced on the credit card giant's shares in 1964, following a scandal that threatened the existence of the company and sent its stock down to bargain-basement levels. As a company, Berkshire followed suit in 1991.
A buy-and-hold investor to his core, Buffett never let go. To this day, Berkshire maintains a monster stake in the company, with 22% of its outstanding shares.
Berkshire wouldn't keep such a tight grip if Amex weren't a constant outperformer. The company habitually posts top-line growth, accompanied by robust profitability that usually beats analyst estimates. The company functions as both the issuer of its credit and the processor of transactions on its cards, positioning it to earn billions in fees and interest charges.
There aren't many financial stocks that do as consistently well as Amex, even through recessions and other trying economic times. This is going to be a winner for many more decades, at least.
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2. Alphabet The parent company of Google, Alphabet is far more than just its core asset's eternally money-spinning search engine.
It's a leader in self-driving technology with Waymo, and a force in artificial intelligence (AI). The latter is due to its specialty homegrown tensor processing units engineered specifically to power the technology, and its growing suite of AI models. As if that weren't enough, its cloud offerings are growing rapidly in popularity.
Granted, not all of Alphabet's businesses bring in revenue immediately; Waymo is a leading example. But the company's star units -- hello, search! -- make vast amounts of money and allow the moonshots plenty of time and space to develop into strong businesses.
The company's top line alone tells the tale. Over the past five years, annual revenue has zoomed from less than $258 billion to almost $403 billion. Profitability is also in the 12-figure range these days, with headline net income coming in at $132 billion last year. And with those up-and-coming revenue streams, this company is just getting warmed up for even bigger things.
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3. Apple Buffett was famous for being very tech-averse over the course of many decades; that stance changed dramatically in 2016 with a splashy buy-in of Apple. That stake swelled to slightly more than 50% of Berkshire's overall equity portfolio; sensibly enough, Berkshire has reduced its stake over the years. Make no mistake: That holding is still huge, with its more than $70 billion value making it Berkshire's largest position.
That works out very well, as Apple has performed better lately than many expected, with surprising top-line growth in its historically sluggish products segment. (Its other main revenue stream, services, has risen more consistently.)
Apple's high-end and sleek products continue to be popular, even after many years on the market -- in fact, the iPhone line will celebrate its 20th birthday in 2027. Meanwhile, the services ecosystem it has built offers numerous growth opportunities. As long as consumers appreciate good, attractive hardware and are willing to pay for the services attached to it, Apple is sure to continue thriving.
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4. Coca-Cola Coca-Cola is not only the maker of its famous beverage; it also boasts a clever business model that gives it extremely high margins. For the most part, the company only sells the foundational syrups for its drinks; it's up to other businesses to concoct and package them into the retail products you and I buy, or the drinks that get poured from the fountain machines.
This strategy produces net margins that consistently land in the mid-20% range. It also generates plenty of cash, which supports a relatively high dividend that increases every year. Coca-Cola, in fact, is a Dividend King, one of the select group of stocks that has declared dividend raises at least once annually for a minimum of 50 years running.
The world will surely never get tired of the sweet, fizzy taste of Coke, or any of the company's other beverages. Investors won't get tired of a stock that has not only risen by orders of magnitude over its long life, but one that dispenses a relatively high-yield dividend, paying out at 2.6% these days.
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5. Moody's Moody's doesn't have the name recognition of an Apple or Coca-Cola. What it does possess is a solid position among the so-called "big three" credit rating agencies, in an American economy that thrives on credit.
Over the past few years, a corporate borrowing boom, fueled by feverish refinancing activity, has lit a fire under the raters, as reflected in the fundamentals. Annual revenue rocketed from $6.2 billion in 2021 to $7.7 billion last year.
But Moody's isn't a one-dimensional company that only judges creditworthiness. Nearly half of its top line comes from Moody's Analytics, a sturdy data and information provider that draws predictable revenue through client subscriptions.
The company is another of those Berkshire holdings that lands well in the black year after year, and decade after decade. On that $7.7 billion in 2025 revenue, Moody's booked a headline net income of nearly $2.5 billion.
The beauty of its business model is that the steadiness and predictability of analytics mitigate the volatility of the ratings segment. With that strong one-two punch, this company will probably never be knocked down from its lofty perch.
NEW YORK--(BUSINESS WIRE)--Moody’s Corporation (NYSE: MCO) will host a Q&A session on June 8, 2026, at 2:00 p.m. Eastern Time. The session will be moderated by Andrew C. Steinerman, Managing Director and Equity Research Analyst at J.P. Morgan, and will feature Cristina Pieretti, General Manager and Head of Generative AI Solutions.
The discussion will focus on Moody’s Generative AI strategy, including partnerships and product innovation and initiatives, and how these efforts support the delivery of differentiated insights for customers.
The webcast can be accessed under “Events & Presentations” on ir.moodys.com.
This event is conducted in compliance with Regulation FD. Senior management may use the content made available for this presentation during subsequent meetings with analysts and investors.
ABOUT Moody’s
In a world shaped by increasingly interconnected risks, Moody’s (NYSE:MCO) data, insights, and innovative technologies help customers develop a holistic view of their world and unlock opportunities. With a rich history of experience in global markets and a diverse workforce of approximately 16,000 across more than 40 countries, Moody’s gives customers the comprehensive perspective needed to act with confidence and thrive.
More News From Moody’s Corporation Investor Relations
Moody’s Corporation (NYSE: MCO) will host a Q&A session on June 8, 2026, at 2:00 p.m. Eastern Time. The session will be moderated by Andrew C. Steinerman, Managing Director and Equity Research Analyst at J.P. Morgan, and will feature Cristina Pieretti, General Manager and Head of Generative AI Solutions.
The discussion will focus on Moody’s Generative AI strategy, including partnerships and product innovation and initiatives, and how these efforts support the delivery of differentiated insights for customers.
The webcast can be accessed under “Events & Presentations” on ir.moodys.com.
This event is conducted in compliance with Regulation FD. Senior management may use the content made available for this presentation during subsequent meetings with analysts and investors.
ABOUT Moody’s
In a world shaped by increasingly interconnected risks, Moody’s NYSE:MCO data, insights, and innovative technologies help customers develop a holistic view of their world and unlock opportunities. With a rich history of experience in global markets and a diverse workforce of approximately 16,000 across more than 40 countries, Moody’s gives customers the comprehensive perspective needed to act with confidence and thrive.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260602313322/en/
On June 10, 2026, we present a detailed DCF analysis for Moodys Corp MCO , a company currently facing price performance challenges with a year-to-date decline of 11.5% and a one-year drop of 6.6%. The current stock price stands at $449.94.
DCF Earnings-based intrinsic value of $267.91 vs price of $449.94 (margin of safety: -67.9%) DCF FCF-based intrinsic value of $264.62 vs price of $449.94 (second opinion) GF Score™ of 91/100 indicates high reliability of the DCF inputs What Is MCO Worth? DCF Earnings-Based Model The DCF earnings-based model for Moodys Corp utilizes a two-stage approach to estimate the intrinsic value of the stock. In the first stage, we project earnings growth over the next ten years, followed by a terminal growth phase. The model assumes a current EPS of $15.45, with a 10-year growth rate of 11.2% and a discount rate of 11%.
Parameter Value Current EPS (TTM, excl. non-recurring) $15.45 10-Year Growth Rate 11.2% 10-Year Treasury Rate 4.53% Discount Rate (ceil(Treasury) + 6%) 11% Terminal Growth Rate 4% In the growth phase (Years 1-10), the EPS is expected to grow at 11.2% annually, which results in a calculated value of $156.04 per share. In the terminal phase (Years 11-20), the growth rate slows to a terminal rate of 4%, yielding a value of $111.87 per share. The intrinsic value is then derived by summing these two stages.
Stage Description Value Growth Stage (Years 1-10) EPS growing at 11.2%, discounted at 11% $156.04 Terminal Stage (Years 11-20) 4% terminal growth, discounted at 11% $111.87 Intrinsic Value Growth + Terminal $267.91 Comparing the current price of $449.94 with the intrinsic value of $267.91 indicates that the stock is modestly overvalued, with a margin of safety of -67.9%. It is important to note that GuruFocus uses EPS without non-recurring items, as research shows that stock prices correlate more closely with earnings than with free cash flow. For further calculations, please refer to the MCO DCF Calculator.
What Does the Free Cash Flow DCF Say? The free cash flow (FCF)-based intrinsic value for Moodys Corp is calculated at $264.62. When comparing this with the earnings-based intrinsic value of $267.91, we find that both models suggest a similar valuation conclusion. Both models indicate that Moodys Corp is modestly overvalued, with a margin of safety of -70.0% for the FCF-based model.
How Does GF Value™ Compare to the DCF Models? The GF Value™ for Moodys Corp is calculated at $536.71, providing a third perspective on valuation. GF Value™ is GuruFocus' proprietary measure derived from historical trading multiples, past business growth, and future performance estimates. While the DCF models indicate that the stock is overvalued, the GF Value™ suggests that it is undervalued by 16.2%. This discrepancy highlights the importance of considering multiple valuation methods. For more information, visit the GF Value™ page.
What Does MCO's GF Score™ Tell Us? The GF Score™ for Moodys Corp is 91/100, which ranks stocks based on five key aspects: Financial Strength, Profitability, Growth, Valuation, and Momentum. Stocks with higher GF Score™ values have been shown to generate higher long-term returns based on backtested data from 2006 to 2021.
Metric Rating GF Score™ 91/100 Financial Strength 6/10 Profitability 9/10 Growth 9/10 Valuation 10/10 Momentum 5/10 With a predictability rank of 1/5 stars, it is important to note that higher predictability ratings indicate that the DCF model is more reliable for this stock. For additional insights, visit the MCO stock page.
Key Assumptions and Limitations It is crucial to understand that DCF models are highly sensitive to the assumptions made regarding growth rates and discount rates. Stocks with low predictability ratings, such as Moodys Corp's 1/5 stars, produce less reliable DCF estimates. The terminal growth rate of 4% is a simplifying assumption that may not reflect future market conditions accurately.
What This Means for Investors In summary, the DCF earnings-based model, the DCF FCF model, and the GF Value™ all provide valuable insights into the valuation of Moodys Corp. While the DCF models suggest that the stock is modestly overvalued, the GF Value™ indicates a potential undervaluation. Overall, the consensus points towards Moodys Corp being overvalued at its current price.
For the full DCF analysis, visit the MCO DCF Calculator. You can also explore the GF Value™ page, or use the GuruFocus Stock Screener to find undervalued predictable companies.
Frequently Asked Questions What is MCO's intrinsic value based on DCF?
Answer: earnings-based $267.91, FCF-based $264.62
Is MCO overvalued or undervalued?
Answer: Both DCF models indicate MCO is overvalued, while GF Value™ suggests it is undervalued.
How reliable is the DCF model for MCO?
Answer: The predictability rank is 1/5, indicating lower reliability of the DCF model for this stock.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
Moody's Corporation is well positioned to benefit from surging corporate debt issuance, with its MIS segment acting as a tollbooth for global credit ratings. MCO's Q1 revenue grew 8.1% year-over-year, driven by record investment-grade issuances and robust demand for AI-related financing from hyperscalers. The company maintains strong financial health (A- S&P rating), a 16-year dividend growth streak, and trades at a 7% discount to a $490 fair value estimate.
Key Takeaways MTB Q1 EPS of $4.18 beat estimates and rose from $3.38 a year ago on higher NII and fee income.MTB's revenue grew 5.8% to $2.44B, with non-interest income up 12.8% and NII rising 3.4%.MTB reported modest loan growth, while deposits declined and provisions for credit losses increased. M&T Bank Corporation (MTB - Free Report) reported first-quarter 2026 net operating earnings per share of $4.18, which beat the Zacks Consensus Estimate of $4.02. The bottom line compared favorably with earnings of $3.38 per share in the year-ago quarter.
Results were aided by higher net interest income (NII) and a rise in non-interest income on a year-over-year basis, along with modest loan growth. However, a decline in deposits, higher provisions for credit losses, and elevated expenses acted as headwinds.
Net income available to common shareholders was $620 million, up 13.3% from the prior-year quarter.
M&T Bank’s Quarterly Revenues & Expenses Rise Y/YMTB’s quarterly revenues were $2.44 billion, surpassing the Zacks Consensus Estimate of $2.43 billion. Further, the reported figure increased 5.8% year over year.
NII (tax equivalent) rose 3.4% year over year to $1.75 billion.
Total non-interest income was $689 million, up 12.8% year over year. The rise was driven by an increase in almost all components.
Total non-interest expenses were $1.44 billion, up 1.6% year over year. The increase was due to higher salaries and employee benefits costs, outside data processing and software costs, along with professional and other services costs.
The efficiency ratio was 58.3%, down from 60.5% in the year-earlier quarter. A lower ratio indicates a rise in profitability.
MTB’s Loan Balance Increases, Deposits DecreaseTotal loans were $139.9 billion as of March 31, 2026, up nearly 1% from the prior quarter. Total deposits declined 1.8% sequentially to $163.7 billion.
M&T Bank’s Credit Quality: Mixed BagNet charge-offs decreased 7.8% to $105 million from the prior-year quarter.
The company recorded a provision for credit losses of $140 million, up 7.7% from the year-ago quarter.
Non-performing assets declined 19.5% year over year to $1.27 billion.
The ratio of non-accrual loans to total net loans was 0.89%, which declined year over year from 1.14%.
MTB’s Capital Position Mixed & Profitability Ratios Improve Y/YM&T Bank’s estimated Common Equity Tier 1 ratio was 10.33%, down from 11.50% as of first-quarter 2025. The tangible equity per share was $115.96, up from $111.13 in the first quarter of 2025.
The company's return on average tangible assets (annualized) and average tangible common shareholder equity were 1.33% and 14.51%, respectively, compared with 1.21% and 12.53% in the prior-year quarter.
M&T Bank’s Capital Distribution UpdateMTB repurchased 5.5 million shares of its common stock in accordance with its capital plan for $1.25 billion in the first quarter of 2026.
Our View on MTBSustained growth in both NII and non-interest income is expected to continue supporting M&T Bank’s organic growth. Additionally, modest loan growth and improving asset quality metrics will likely support its overall performance. However, declining deposit balances, higher provisions for credit losses and elevated expenses are near-term concerns.
M&T Bank Corporation Price, Consensus and EPS SurpriseEarnings Release Dates of Other Major BanksCitizens Financial Group (CFG - Free Report) is scheduled to release first-quarter 2026 earnings on April 16.
The Zacks Consensus Estimate for CFG’s quarterly earnings has remained unchanged at $1.10 per share over the past seven days. This indicates a 42.8% rise from the prior-year reported number.
Huntington Bancshares Inc. (HBAN - Free Report) is also slated to report first-quarter 2026 results on April 23.
Over the past seven days, the Zacks Consensus Estimate for HBAN’s quarterly earnings has been unchanged at 36 cents per share. This implies a 5.9% rise from the prior-year reported number.
M&T Bank (MTB) delivered a strong Q1, with EPS of $4.13 and revenue up 6% year-over-year, exceeding expectations. MTB achieved net interest margin expansion to 3.71%, driven by asset yields rising faster than funding costs, and issued robust 2026 net interest income guidance. Loan growth was led by commercial, residential, and consumer segments, while asset quality remained resilient with declining non-accrual loans and stable charge-offs.
M&T Bank Corp (MTB) Q1 2026 Earnings Call Highlights: Navigating Challenges with Strategic Growth M&T Bank Corp (MTB) reports a mixed quarter with strong fee income growth and strategic share repurchases amid declining earnings. Summary
Net Interest Margin (NIM): Expanded by 2 basis points to 3.71%.Average C&I Loans: Increased by $1.5 billion from the fourth quarter.Fee Income: Grew 13% year-over-year.Net Charge-Offs: 31 basis points, down from 54 basis points in the prior quarter.Share Repurchases: Executed $1.25 billion, representing over 3.5% of shares outstanding.Diluted GAAP Earnings Per Share: $4.13, down from $4.67 in the prior quarter.Net Income: $664 million, compared to $759 million in the linked quarter.Return on Assets (ROA): 1.26%.Return on Common Equity (ROCE): 9.67%.Net Operating Income: $671 million, compared to $767 million in the linked quarter.Net Operating Earnings Per Share: $4.18, down from $4.72 in the prior quarter.Average Loans and Leases: Increased by $0.8 billion to $138.4 billion.Average Total Deposits: Declined by $0.8 billion to $164.3 billion.Noninterest Income: $689 million, compared to $696 million in the linked quarter.Noninterest Expense: $1.44 billion, an increase of $59 million from the prior quarter.Allowance for Loan Losses: Unchanged at 1.53% of total loans.CET1 Ratio: Estimated at 10.33%, a decline of 51 basis points from the fourth quarter.
Release Date: April 15, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points M&T Bank Corp MTB reported a strong start to the year with net interest margin expanding by 2 basis points.The bank executed $1.25 billion in share repurchases, representing over 3.5% of shares outstanding.Fee income grew 13% from the first quarter of 2025, with solid year-over-year growth in each fee category.Asset quality improved notably, with a $700 million reduction in criticized balances and net charge-offs of 31 basis points.M&T Bank Corp (MTB) maintained strong capital levels, providing flexibility for further share repurchases. Negative Points Diluted GAAP earnings per share decreased to $4.13 from $4.67 in the prior quarter.Net income fell to $664 million, compared to $759 million in the linked quarter.Noninterest income slightly decreased to $689 million from $696 million in the linked quarter.Noninterest expenses increased by $59 million from the prior quarter, impacting the efficiency ratio.The CET1 ratio declined by 51 basis points due to share repurchases and increased risk-weighted assets. Q & A Highlights Q: Can you clarify if M&T Bank will adopt the ERB proposal and what drives the benefit?
A: The proposal is still in the comment and approval process, so we can't commit to adopting ERB yet. However, if there's a clear advantage, we would likely opt in. The benefit is driven by credit and operational risk considerations. - Daryl Bible, CFO
Q: With the new capital proposals, what would be the normalized CET1 level for M&T Bank, and how quickly can you achieve it?
A: If the proposal is adopted, our CET1 ratio could increase by 100 basis points. We need to assess how rating agencies view this change, but we expect to trend lower in the tangible equity ratio. - Daryl Bible, CFO
Q: Why is the margin coming in below prior expectations, and what factors are influencing this?
A: The margin is affected by slower consumer indirect growth due to weather and seasonal CRE declines. However, we saw strong CRE originations in March and expect growth in the second quarter. Higher rates also impact DDA account growth. - Daryl Bible, CFO
Q: What has driven the growth in M&T's NDFI portfolio over the last five years?
A: The growth is primarily in mortgage warehouse lending, lending to REITs, and fund banking. These are core, profitable businesses with sound credit practices. - Daryl Bible, CFO
Q: Can you expand on the outlook for commercial real estate (CRE) lending?
A: We have a strong CRE platform with distinct business lines. We expect regional CRE to grow, and our originate-and-sell business is performing well. We also focus on affordable housing and warehouse business. - Daryl Bible, CFO
Q: How does M&T Bank view deposit competition, and what is the strategy for deposit growth?
A: We aim to pay competitive rates and have consistently grown customer deposits. Our strategy focuses on securing operating accounts, which opens opportunities for additional business. - Daryl Bible, CFO
Q: What is the outlook for fee income growth, and what are the key drivers?
A: We expect strong fee income growth, driven by subservicing, trust businesses, treasury management, and capital markets. We may exceed our current fee income range. - Daryl Bible, CFO
Q: How does M&T Bank plan to manage excess capital, especially with potential benefits from new capital rules?
A: We will continue to assess the situation as the rules are finalized. Our focus is on serving all constituencies and making prudent decisions regarding capital deployment. - Daryl Bible, CFO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
Getting big returns from financial portfolios, whether through stocks, bonds, ETFs, other securities, or a combination of all, is an investor's dream. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
Cash flow can come from bond interest, interest from other types of investments, and, of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Headquartered in Buffalo, M&T Bank Corporation (MTB - Free Report) is a Finance stock that has seen a price change of 9.03% so far this year. The company is currently shelling out a dividend of $1.50 per share, with a dividend yield of 2.73%. This compares to the Banks - Major Regional industry's yield of 2.76% and the S&P 500's yield of 1.39%.
Looking at dividend growth, the company's current annualized dividend of $6.00 is up 5.3% from last year. Over the last 5 years, M&T Bank Corporation has increased its dividend 3 times on a year-over-year basis for an average annual increase of 5.36%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. M&T Bank's current payout ratio is 33%, meaning it paid out 33% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, MTB expects solid earnings growth. The Zacks Consensus Estimate for 2026 is $18.68 per share, representing a year-over-year earnings growth rate of 8.60%.
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. But, not every company offers a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, MTB is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of #3 (Hold).
Resources Investor Relations Journalists Agencies Client Login Send a Release News Products Contact , /PRNewswire/ -- M&T Bank Corporation ("M&T") (NYSE:MTB) announced that it has declared a quarterly cash dividend of $1.50 per share on its common stock. The dividend will be payable June 30, 2026, to shareholders of record at the close of business on June 1, 2026.
M&T has also declared quarterly cash dividends on the following series of perpetual preferred stock:
A dividend of $0.3515625 per share on its Perpetual Fixed-to-Floating Rate Non-Cumulative Preferred Stock, Series H ("Series H Preferred Stock") A dividend of $187.50 per share (equivalent to $0.46875 per depositary share) on its Perpetual 7.500% Non-Cumulative Preferred Stock, Series J ("Series J Preferred Stock") A dividend of $158.75 per share (equivalent to $0.396875 per depositary share) on its Perpetual 6.350% Non-Cumulative Preferred Stock, Series K ("Series K Preferred Stock") Each perpetual preferred stock dividend will be payable June 15, 2026 to shareholders of record at the close of business on June 1, 2026.
About M&T
M&T is a financial holding company headquartered in Buffalo, New York. M&T's principal banking subsidiary, M&T Bank, provides banking products and services with a branch and ATM network spanning the eastern U.S. from Maine to Virginia and Washington, D.C. Trust-related services are provided in select markets in the U.S. and abroad by M&T's Wilmington Trust-affiliated companies and by M&T Bank. For more information about M&T Bank, visit www.mtb.com.
Resources Investor Relations Journalists Agencies Client Login Send a Release News Products Contact , /PRNewswire/ -- M&T Bank Corporation ("M&T") (NYSE: MTB) will participate in the Barclays Americas Select Franchise Conference being held in London. Representatives of M&T are scheduled to deliver a presentation to investors and analysts on May 5, 2026, at 9:45 a.m. BST (4:45 a.m. ET).
A link to the webcast will be available at https://ir.mtb.com/events-presentations. The webcast may contain material information as well as forward-looking information, and cautionary statements regarding such forward-looking information will be available on the webcast link.
About M&T
M&T Bank Corporation is a financial holding company headquartered in Buffalo, New York. M&T's principal banking subsidiary, M&T Bank, provides banking products and services with a branch and ATM network spanning the eastern U.S. from Maine to Virginia and Washington, D.C. Trust-related services are provided in select markets in the U.S. and abroad by M&T's Wilmington Trust-affiliated companies and by M&T Bank. For more information on M&T Bank, visit www.mtb.com.
M&T Bank delivers robust returns, with Q1 2026 EPS up 24.4% and strong capital allocation discipline. MTB's forward P/E of 11.4 and 10.1% projected EPS CAGR through 2028 signal a 12% discount to $250 fair value. Consistent share buybacks and a 2.7% yield, supported by a low-30% payout ratio, underpin MTB's 8% annual dividend growth.
BOSTON--(BUSINESS WIRE)--Verogy Holdings, LLC, a West Hartford, Connecticut-based distributed energy integrator committed to delivering innovative, best-in-class energy solutions, has completed a sale-leaseback financing with M&T Bank for a portfolio of seven commercial and industrial (C&I) solar projects totaling approximately 2.7 MW across multiple U.S. states. The portfolio serves a mix of corporate and municipal customers and reflects continued momentum in distributed generation as.
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
M&T Bank Corporation (MTB - Free Report) is headquartered in Buffalo, and is in the Finance sector. The stock has seen a price change of 7.91% since the start of the year. The company is paying out a dividend of $1.50 per share at the moment, with a dividend yield of 2.76% compared to the Banks - Major Regional industry's yield of 2.83% and the S&P 500's yield of 1.41%.
Looking at dividend growth, the company's current annualized dividend of $6.00 is up 5.3% from last year. Over the last 5 years, M&T Bank Corporation has increased its dividend 3 times on a year-over-year basis for an average annual increase of 5.36%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. M&T Bank's current payout ratio is 33%, meaning it paid out 33% of its trailing 12-month EPS as dividend.
MTB is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2026 is $18.69 per share, representing a year-over-year earnings growth rate of 8.66%.
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. But, not every company offers a quarterly payout.
For instance, it's a rare occurrence when a tech start-up or big growth business offers its shareholders a dividend. It's more common to see larger companies with more established profits give out dividends. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, MTB is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of #3 (Hold).
It has been about a month since the last earnings report for M&T Bank Corporation (MTB - Free Report) . Shares have lost about 5.2% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is M&T Bank due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
M&T Bank Q1 Earnings Beat on Strong Y/Y NII & Fee Income GrowthM&T Bank reported first-quarter 2026 net operating earnings per share of $4.18, which beat the Zacks Consensus Estimate of $4.02. The bottom line compared favorably with earnings of $3.38 per share in the year-ago quarter.
Results were aided by higher net interest income and a rise in non-interest income on a year-over-year basis, along with modest loan growth. However, a decline in deposits, higher provisions for credit losses, and elevated expenses acted as headwinds.
Net income available to common shareholders was $620 million, up 13.3% from the prior-year quarter.
Revenues & Expenses Rise Y/Y
The company’s quarterly revenues were $2.44 billion, surpassing the Zacks Consensus Estimate of $2.43 billion. Further, the reported figure increased 5.8% year over year.
NII (tax equivalent) rose 3.4% year over year to $1.75 billion.
Total non-interest income was $689 million, up 12.8% year over year. The rise was driven by an increase in almost all components.
Total non-interest expenses were $1.44 billion, up 1.6% year over year. The increase was due to higher salaries and employee benefits costs, outside data processing and software costs, along with professional and other services costs.
The efficiency ratio was 58.3%, down from 60.5% in the year-earlier quarter. A lower ratio indicates a rise in profitability.
Loan Balance Increases, Deposits Decrease
Total loans were $139.9 billion as of March 31, 2026, up nearly 1% from the prior quarter. Total deposits declined 1.8% sequentially to $163.7 billion.
Credit Quality: Mixed Bag
Net charge-offs decreased 7.8% to $105 million from the prior-year quarter.
The company recorded a provision for credit losses of $140 million, up 7.7% from the year-ago quarter.
Non-performing assets declined 19.5% year over year to $1.27 billion.
The ratio of non-accrual loans to total net loans was 0.89%, which declined year over year from 1.14%.
Capital Position Mixed & Profitability Ratios Improve Y/Y
M&T Bank’s estimated Common Equity Tier 1 ratio was 10.33%, down from 11.50% as of first-quarter 2025. The tangible equity per share was $115.96, up from $111.13 in the first quarter of 2025.
The company's return on average tangible assets (annualized) and average tangible common shareholder equity were 1.33% and 14.51%, respectively, compared with 1.21% and 12.53% in the prior-year quarter.
Outlook2026
Management projects NII (tax equivalent basis) to be $7.2–$7.35 billion. The company expects NIM to be in the high 3.60% range, revised downward from the prior expectation of the low 3.70% range.
Non-interest income is anticipated between $2.68 billion and $2.77 billion, revised upward from the prior projection of $2.67 billion to $2.77 billion. The company expects the metric to be at the high end of the range, driven by broad-based growth across fee types and business lines.
The company expects expenses (GAAP), including intangible amortization, to be $5.5–$5.6 billion. The metric is projected at the high end of the range, reflecting continued investment in enterprise initiatives and well-managed non-investment spend.
The company expects average loan and lease balances to be $140 billion to $142 billion. Average total deposit balances are anticipated to be $165–$167 billion.
The NCO rate is projected to be around 40 bps.
CET 1 ratio is now expected to be around 10%, revised downward from the prior range of 10.25% to 10.5%.
The tax rate is anticipated to be around 24%, narrowed from the prior guidance of 24% to 24.5% for 2026.
How Have Estimates Been Moving Since Then?In the past month, investors have witnessed a downward trend in estimates revision.
VGM ScoresCurrently, M&T Bank has a subpar Growth Score of D, though it is lagging a bit on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for value investors.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, M&T Bank has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Resources Investor Relations Journalists Agencies Client Login Send a Release News Products Contact , /PRNewswire/ -- M&T Bank Corporation ("M&T") (NYSE:MTB) will participate in the Morgan Stanley US Financials Conference being held in New York City. Representatives of M&T are scheduled to deliver a presentation to investors and analysts on June 10, 2026, at 9:00 a.m. (ET).
A link to the webcast will be available at https://ir.mtb.com/events-presentations. The webcast may contain material information as well as forward-looking information, and cautionary statements regarding such forward-looking information will be available on the webcast link.
About M&T
M&T Bank Corporation is a financial holding company headquartered in Buffalo, New York. M&T's principal banking subsidiary, M&T Bank, provides banking products and services with a branch and ATM network spanning the eastern U.S. from Maine to Virginia and Washington, D.C. Trust-related services are provided in select markets in the U.S. and abroad by M&T's Wilmington Trust-affiliated companies and by M&T Bank. For more information on M&T Bank, visit www.mtb.com.
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
While cash flow can come from bond interest or interest from other types of investments, income investors hone in on dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
Based in Buffalo, M&T Bank Corporation (MTB - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of 5.81%. The company is paying out a dividend of $1.50 per share at the moment, with a dividend yield of 2.81% compared to the Banks - Major Regional industry's yield of 2.93% and the S&P 500's yield of 1.42%.
Looking at dividend growth, the company's current annualized dividend of $6.00 is up 5.3% from last year. Over the last 5 years, M&T Bank Corporation has increased its dividend 3 times on a year-over-year basis for an average annual increase of 5.36%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. M&T Bank's current payout ratio is 33%, meaning it paid out 33% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for MTB for this fiscal year. The Zacks Consensus Estimate for 2026 is $18.69 per share, representing a year-over-year earnings growth rate of 8.66%.
Investors like dividends for many reasons; they greatly improve stock investing profits, decrease overall portfolio risk, and carry tax advantages, among others. However, not all companies offer a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, MTB is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of #3 (Hold).
On June 04, 2026, M&T Bank Corp MTB shares rose 3.6% today, bringing the current price to $221.73. This increase comes amidst a 52-week range of $174.76 to $239.00, demonstrating notable volatility and performance over the past year.
GF Value™ verdict: Current price is $221.73 vs GF Value™ of $202.08, indicating the stock is 9.7% overvalued.GF Score™: 75/100, which is considered Above Average and suggests potential for solid long-term returns.Most notable signal: Insiders have sold $0.7M in shares over the last 3 months, with no buying activity. Is MTB Overvalued or Undervalued? M&T Bank Corp's current price of $221.73 is significantly above the GF Value™ estimate of $202.08, marking a 9.7% overvaluation. This suggests that the stock may not provide a favorable entry point for new investors, as it is trading above its intrinsic value. Furthermore, the GF Valuation label indicates that the stock is fairly valued, which implies there is limited margin of safety at this price level. Investors considering a position in MTB should be aware of the potential risks associated with purchasing a stock that is trading above its calculated fair value.
GF Value™ is GuruFocus' proprietary measure of intrinsic value, calculated from historical trading multiples, past business growth, and future performance estimates. This methodology provides a comprehensive framework for evaluating whether a stock is overvalued or undervalued, based on its historical performance and market conditions.
How Does MTB's Valuation Compare to Its History? Metric Current Historical P/E (TTM) 12.4x 12.0x (5-Year Median) Forward P/E 11.8x N/A The current P/E ratio of 12.4x is slightly above the 5-year median P/E of 12.0x, indicating that the stock is trading at a premium compared to its historical valuation. This P/E analysis aligns with the GF Value™ verdict of overvaluation, suggesting that the current price may not be justified when considering historical earnings multiples.
What Does MTB's GF Score™ Tell Us? The GF Score™ ranks stocks based on five key aspects, providing a comprehensive view of their potential for long-term growth. The breakdown for M&T Bank Corp is as follows:
Metric Rating GF Score™ 75 Financial Strength 3/10 Profitability 6/10 Growth 6/10 Valuation 7/10 Momentum 8/10 M&T Bank Corp's strongest area is its momentum rank of 8/10, indicating positive price movements over recent periods. However, its financial strength score of 3/10 raises concerns about the company's stability and ability to weather economic downturns. The overall GF Score™ of 75/100 suggests that while MTB has potential for solid returns, there are notable weaknesses in financial strength that could impact its future performance.
What Are Insiders Doing with MTB Stock? In the last three months, insiders have sold approximately $0.7 million worth of M&T Bank Corp shares, with no reported buying activity. This trend may indicate a lack of confidence from insiders about the stock's current valuation or future performance. When insiders sell shares, it could suggest that they believe the stock price has peaked or that they are concerned about the company's prospects.
What This Means for Investors Based on the GF Value™ assessment, M&T Bank Corp is currently overvalued. Investors may want to exercise caution when considering new positions, as the stock is trading above its estimated fair value.
For the complete analysis, visit the M&T Bank Corp MTB stock page. You can also explore the GF Value™ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.
Frequently Asked Questions What is MTB's GF Score™?
The GF Score™ for M&T Bank Corp is 75/100, indicating an Above Average rating that suggests potential for solid long-term returns based on key financial metrics.
Is MTB overvalued or undervalued?
According to GF Value™, M&T Bank Corp is currently overvalued, with a price of $221.73 compared to an estimated fair value of $202.08.
What is MTB's P/E ratio?
M&T Bank Corp's current P/E ratio is 12.4x, which is slightly above its 5-year median P/E of 12.0x, suggesting it is trading at a premium compared to its historical valuation.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
Cash flow can come from bond interest, interest from other types of investments, and, of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends make up large portions of long-term returns, and in many cases, dividend contributions surpass one-third of total returns.
M&T Bank Corporation (MTB - Free Report) is headquartered in Buffalo, and is in the Finance sector. The stock has seen a price change of 11.89% since the start of the year. Currently paying a dividend of $1.50 per share, the company has a dividend yield of 2.66%. In comparison, the Banks - Major Regional industry's yield is 2.8%, while the S&P 500's yield is 1.45%.
Looking at dividend growth, the company's current annualized dividend of $6.00 is up 5.3% from last year. Over the last 5 years, M&T Bank Corporation has increased its dividend 3 times on a year-over-year basis for an average annual increase of 5.36%. Looking ahead, future dividend growth will be dependent on earnings growth and payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. M&T Bank's current payout ratio is 33%, meaning it paid out 33% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for MTB for this fiscal year. The Zacks Consensus Estimate for 2026 is $18.69 per share, with earnings expected to increase 8.66% from the year ago period.
From greatly improving stock investing profits and reducing overall portfolio risk to providing tax advantages, investors like dividends for a variety of different reasons. But, not every company offers a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors have to be mindful of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, MTB is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of #3 (Hold).
Enhanced platform reflects continued momentum, user-informed innovation and growing adoption among attorneys
, /PRNewswire/ -- M&T Bank (NYSE:MTB) today announced the renewal of its relationship with The Florida Bar to continue providing members with free access to the M&T Bank Nota platform, a cloud-based solution designed to help attorneys manage Interest on Trust Accounts (IOTA) more efficiently.
The renewed agreement builds on M&T Bank and The Florida Bar's initial collaboration announced in June 2023, when Nota was introduced as a member benefit to help attorneys navigate the complexities of trust accounting while staying aligned with regulatory requirements.
Since launch, the platform has continued to evolve through close collaboration with Florida Bar members, with ongoing enhancements designed to better support how attorneys manage their practices day to day.
Sean McCabe, Director of Business Banking Products, M&T Bank, said, "This collaboration has been defined by steady progress and practical improvements that reflect how attorneys actually manage their work. As adoption has grown, so has the platform's ability to support more efficient, accurate trust account management."
Developed to address the complexity and precision required in trust account management, Nota provides attorneys with greater visibility into account activity while supporting reconciliation and financial workflows within a single platform. By reducing reliance on manual processes, the platform helps firms operate with increased confidence and efficiency.
The renewed relationship reflects continued momentum, with Nota increasingly becoming part of how attorneys manage trust accounting in their daily practice. Since the launch of this initiative, over 900 Florida Bar members have taken advantage of Nota as a member benefit.
Rosalyn Sia Baker-Barnes, President, The Florida Bar, said, "Our members are looking for practical solutions that help them manage complex responsibilities with greater ease and confidence. Nota has become a valuable resource in that effort, and this renewed relationship ensures continued access to a tool that supports their work."
Enhancements to Nota introduced since the initial launch include:
Improved reconciliation workflows designed to reduce manual steps and support accuracy Expanded integrations with commonly used legal and financial tools User experience enhancements informed by ongoing feedback from attorneys Continued investment in features that support compliance and audit readiness The renewal comes as adoption of digital tools continues to increase across the legal sector, particularly among solo practitioners and small firms. At the time of launch, these firms represented a significant share of Florida attorneys and faced increasing pressure to manage trust accounts efficiently and in line with regulatory requirements.
Nota remains available to The Florida Bar's members as part of its Member Benefits Program.*
For more information, please visit mtb.com/thefloridabar.
ABOUT M&T BANK
M&T Bank is a financial holding company headquartered in Buffalo, New York. M&T's principal banking subsidiary, M&T Bank, provides banking products and services with a branch and ATM network spanning the eastern U.S. from Maine to Virginia and Washington, D.C. Trust-related services are provided in select markets in the U.S. and abroad by M&T's Wilmington Trust-affiliated companies and by M&T Bank. For more information about M&T Bank, visit www.mtb.com.
Founded in 1949, The Florida Bar serves the legal profession for the protection and benefit of both the public and all Florida lawyers. As one of the nation's largest mandatory bars, The Florida Bar fosters and upholds a high standard of integrity and competence within Florida's legal profession as an official arm of the Florida Supreme Court. To learn more, visit www.FloridaBar.org.
* M&T Nota will waive the $25 per month monthly maintenance fee for Florida Bar members as a member benefit of The Florida Bar. This benefit is available to current, active members of The Florida Bar and is subject to verification of membership status. This offer is contingent upon the member maintaining their active status with the Florida Bar and may be subject to change at any time. Additional terms and conditions may apply.
Nota is a product/service offered by M&T Bank. Use of Nota does not ensure compliance with state rules and regulations applicable to Clients' Funds Trust Accounts (IOLTA / IOLA) . The advertised product/services and their features and availability are subject to change without notice at any time. Use of the product/service is subject to and governed by certain terms, conditions, and agreements required by Nota. Attorneys whose offices and practices are in NY, NJ, MD, PA, DE, CT, VA, DC, NH, MA, ME, VT, FL, or WV are eligible for banking products/services through M&T Bank. The use of such M&T banking services is subject to certain terms, conditions, and agreements required by M&T.
Media Contacts:
Frank Lentini, Nota
(929) 651-0447 / [email protected]
Jennifer Krell Davis, The Florida Bar
(850) 561-5670 / [email protected]
On May 11, 2026, First Solar Inc FSLR shares rose 6.1% to $233.27, showing a strong recovery in price performance over the past week (+10.3%) and month (+14.7%), although the year-to-date performance remains down by 10.7%. The shares have traded within a 52-week range of $133.75 to $285.99.
GF Value™ verdict: Current price is $233.27, compared to GF Value™ of $268.80, indicating a 13.2% undervaluation.GF Score™ of 91/100 suggests a strong overall rating, indicating potential for long-term returns.Insider activity reveals that insiders have sold $15.8M worth of shares in the last three months, with no recent buying. Is FSLR Overvalued or Undervalued? Currently, First Solar Inc FSLR is trading at $233.27, which is below its GF Value™ estimate of $268.80, suggesting that the stock is undervalued by approximately 13.2%. This margin of safety could present an opportunity for investors looking for stocks with favorable intrinsic value metrics. The GF Valuation label indicates that the stock is modestly undervalued, which implies that while there is potential for price appreciation, there are also factors that warrant caution.
GF Value™ is GuruFocus' proprietary measure of intrinsic value, calculated from historical trading multiples, past business growth, and future performance estimates. The undervaluation of FSLR, coupled with a strong financial strength rating of 9/10, paints a positive picture for potential investment, although the recent insider selling activity might raise concerns regarding insider confidence in the stock's future performance.
How Does FSLR's Valuation Compare to Its History? Metric Current Historical P/E (TTM) 15.1x 19.8x Forward P/E 13.4x - First Solar's current P/E ratio of 15.1x is significantly below its 5-year median P/E of 19.8x, indicating that the stock is trading at a discount compared to its historical average. This analysis aligns with the GF Value™ verdict of undervaluation, as the lower current P/E ratio suggests that the market may not fully recognize the company’s growth potential relative to its past performance.
What Does FSLR's GF Score™ Tell Us? Metric Rating GF Score™ 91 Financial Strength 9/10 Profitability 7/10 Growth 9/10 Valuation 8/10 Momentum 8/10 The GF Score™ of 91/100 indicates that First Solar has strong potential for long-term returns. The highest ratings in Financial Strength (9/10) and Growth (9/10) suggest solid operational fundamentals and promising growth prospects. However, the Profitability rank of 7/10 indicates that there might be room for improvement in profit margins or returns compared to peers. Overall, the strong scores in financial strength and growth reinforce the positive outlook for FSLR's valuation.
What Are Insiders Doing with FSLR Stock? In the last three months, insiders at First Solar Inc have sold $15.8 million worth of stock, with no reported insider buying during this period. This trend of selling could suggest a lack of confidence from insiders in the stock's near-term performance or a strategic decision to realize gains. While the absence of buying could be a concern for potential investors, it is also common for insiders to sell shares for various reasons unrelated to the company’s performance, such as personal financial planning.
What This Means for Investors Based on the analysis, First Solar Inc FSLR is currently undervalued according to the GF Value™, presenting a potential opportunity for long-term investors. However, the recent insider selling activity and the modest predictability rating of 1 star warrant a cautious approach. Investors should consider these factors when evaluating FSLR's stock as part of their portfolio.
For the complete analysis, visit the First Solar Inc FSLR stock page. You can also explore the GF Value™ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.
Frequently Asked Questions What is FSLR's GF Score™?
FSLR's GF Score™ is 91/100, indicating a strong potential for long-term returns based on its financial strength, growth, and overall performance metrics.
Is FSLR overvalued or undervalued?
FSLR is currently undervalued, with a GF Value™ of $268.80 compared to the current price of $233.27, representing a 13.2% margin of safety.
What is FSLR's P/E ratio?
FSLR's P/E ratio is 15.1x, which is 24% below its 5-year median P/E of 19.8x, indicating that the stock is trading at a discount relative to its historical valuation.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
Disclosures I/We may personally own shares in some of the companies mentioned above. However, those positions are not material to either the company or to my/our portfolios.
