What does MSCI's 2024 earnings trend suggest for 2025?

MSCI's 2024 earnings trend suggests a positive outlook for 2025, with potential for stock gains driven by net subscription growth and strong retention rate. 1. **Consistent Growth**: MSCI has demonstrated consistent growth in its compound earnings per share (EPS), with a 17% annual growth rate over the past five years. This suggests a strong underlying business performance that could translate into continued growth in 2025. 2. **Positive Analyst Sentiment**: Analysts are optimistic about MSCI's prospects for 2025, with expectations of hitting double-digit net subscription growth. This is supported by RBC Capital Markets' reaffirmation of an Outperform rating with a $675 price target, indicating confidence in MSCI's momentum. 3. **Retention Rate Indicators**: MSCI's retention rate, at 94%, indicates a strong ability to retain clients and customers, which is a positive indicator for future revenue growth. A high retention rate suggests that existing clients are likely to continue using MSCI's services, providing a stable revenue base for 2025. 4. **Earnings and Revenue Trends**: While MSCI's revenue growth in 2024 slightly missed forecasts, the company's adjusted EPS beat expectations. This could suggest that MSCI is managing to outperform in areas beyond revenue, which is a positive sign for 2025 earnings potential. 5. **Insider Confidence**: The recent sale of shares by Pettit CD Baer, the President and Chief Operating Officer, was executed under a Rule 10b5-1 trading plan, indicating that the insider viewed the transaction as part of regular trading activities and not a reflection of reduced confidence in the company's prospects. In conclusion, MSCI's 2024 earnings trend, along with positive analyst sentiment and strong retention rates, suggest that 2025 could be a favorable year for MSCI, with potential for continued growth and momentum in the company's stock.