Analysts at Oppenheimer raised their price target on Moody's Corporation (NYSE:MCO) to $418 from $406, mentioning they believe the company has been an underappreciated business.

Since CEO Rob Fauber took over earlier this year, the company has positioned itself to become a leading integrated risk assessment company, which will integrate data and analytics into its technology stack. The brokerage believes the company will continue to make investments in growing its data and analytics capabilities in areas such as insurance, private company, commercial real estate, ESG and KYC/compliance.

We look favorably upon MCO's long-term prospects. Even though MCO is widely known as one of the largest rating agencies in the world, the non-rating agency business actually generates ~40% of revenue for the company.

According to Oppenheimer’s analysts, the company is way more than a rating agency, aiming to become a leader in analytical business and having favorable long-term prospects.

Other than enjoying the secular tailwinds, including rising corporate debt, ESG, and growing importance in compliance and KYC, the brokerage thinks the company also has strong fundamentals including oligopolistic positions in Ratings, a scalable platform, and shareholder-friendly capital return policies to support its premium valuation.