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S&P 500
Financial Services
Jan 17, 2024

After conducting a forensic financial review of MSCI (founded as Morgan Stanley Capital International), a provider of decision support tools and solutions for the global investment community, Spruce Point believes the business' four main segments are under pressure and facing client retention challenges. Based on our investigation, we estimate a 55% to 65% long-term downside risk, or $190.00 – $244.00 per share.

The report highlights several key concerns with the company, including:

  • Evidence that MSCI’s core index business is under pressure, client Retention Rates are declining, executive leadership is being replaced, and reputational risks are rising
  • MSCI’s Analytics segment also appears under pressure, anchored by increasingly commoditized solutions
  • Despite having been MSCI’s recent growth driver, the Company’s ESG and Climate segment is now beginning to struggle
  • MSCI is shifting attention to Adjusted EPS while cash flow and dividend growth struggles and aggressive accounting decisions flatter revenue and costs
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