S&P Global (SPGI) and Moody's (MCO) are expected to benefit from higher-than-expected debut issuance this year after a solid Q1, Morgan Stanley said Tuesday in a report.

Debt issuance rose 13% in Q1 from a year earlier, though S&P Global (SPGI) and Moody's probably will maintain guidance amid geopolitical uncertainty, the report said.

This year's issuance should be supported by a recovery in mergers and acquisitions, AI data-center financing and a steady pipeline of upcoming debt maturities, Morgan Stanley said.

"We expect the issuance environment to be stronger than the market currently expects," the report said. "If global conflicts persist or escalate, that could cause meaningful capital market disruption and be negative to issuance activity."

Morgan Stanley lowered its price target on S&P Global stock to $556 from $580 and maintained its overweight rating. It cut its price target on Moody's shares to $489 from $526 and reiterating its equal weight rating.

Moody's Q1 results are due April 22 with S&P Global reporting April 28.

S&P Global shares fell 0.8% in Tuesday trading, and Moody's dropped 1.5%.

Price: 430.71, Change: -3.40, Percent Change: -0.78