S&P Global (SPGI) reported solid Q1 results with revenue from its Ratings business well ahead of peer Moody's (MCO) and its margin above muted forecasts, Morgan Stanley said in a note emailed Wednesday.

S&P's organic Ratings revenue increase was 11.5% ahead of Moody's, which saw an about 6% increase during the quarter, the note said.

Morgan Stanley noted, however, that while issuance was strong throughout the quarter, an increase in geopolitical tensions may derail momentum if conditions deteriorate.

Meanwhile, S&P's margins rose 93 basis points year on year, which was well above consensus estimates of about flat, and the company's 2026 margin guidance is now looking conservative, the note said.

Additionally, S&P's Market Intelligence division "which is arguably the biggest focus for investors, cleared the bar with 6.3% organic growth," the note said.

Morgan Stanley kept S&P's overweight rating and increased the company's price target to $557 from $556.

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