MSCI Aims To Strengthen Buy-Side Conditions, Boost Earnings In 2025

MSCI Inc MSCI had reported a revenue beat amid strong third-quarter results.

With buy-side purchasing conditions beginning to improve, there is likely to be a "reacceleration in overall organic revenue growth in 2025 and valuation upside in MSCI shares," according to Goldman Sachs.

Analyst George Tong upgraded the rating for MSCI from Neutral to Buy, while raising the price target from $617 to $723.

The MSCI Thesis: While global fund outflows from active managers stabilized exiting the third quarter, active equity funds in the US experienced inflows after the Presidential elections due to "policy-related rotations, Tong said in the upgrade note.

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The positive momentum in global new fund formation is likely to continue into 2025 "due to a broadening of stock returns beyond the large cap tech sector under a Trump administration," he added.

"We expect ESG organic revenue growth to reaccelerate in 2025, as well, driven by increased ESG visibility in the US post-election allowing fund managers to lean into strategies that will still see tailwinds in a Trump policy environment, and by regulatory tailwinds from SFDR (Sustainable Finance Disclosure Regulation) in the EU that has already prompted sizable ESG equity inflows," the analyst wrote.

"Against this backdrop of strengthening buy-side conditions, we see attractive upside potential in MSCI shares driven by EPS growth in 2025/2026 that comes above consensus expectations and valuation multiple expansion," he further wrote.

Price Action: Shares of MSCI had risen by 0.63% to $615.38 at the time of publication on Wednesday.

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