Barclays cuts Equifax stock rating, price target to $260

On Friday, Barclays (LON:BARC) analysts made a significant adjustment to their outlook on Equifax stock, downgrading the rating from Overweight to Equal Weight and slashing the price target to $260 from the previous $325. The new target represents a substantial decrease, reflecting concerns over various market risks. According to InvestingPro data, 16 analysts have recently revised their earnings estimates downward, while the stock currently trades at a P/E ratio of 47.92x, suggesting rich valuation levels. The stock has already declined 8.9% year-to-date, with a beta of 1.65 indicating higher volatility than the broader market.

The revision in Equifax’s stock rating and price target follows Barclays’ latest analysis of the company’s financial projections. The analysts noted that Equifax’s first-quarter 2025 estimated revenue, adjusted EBITDA, and adjusted EPS are expected to be slightly above the high end of the company’s guidance, with increases of $27 million, $10 million, and $0.05, respectively. With a market capitalization of $28.75 billion and impressive gross profit margins of 56.55%, Equifax maintains strong fundamentals despite current headwinds. For deeper insights into Equifax’s valuation and growth prospects, InvestingPro subscribers can access comprehensive financial health scores and detailed analysis in the Pro Research Report. However, for the full year 2025, the estimates are roughly in line with the mid-point of guidance, showing decreases of $14 million in revenue, $11 million in adjusted EBITDA, and $0.06 in adjusted EPS compared to previous estimates. Based on InvestingPro’s Fair Value analysis, the stock appears to be trading above its intrinsic value, aligning with the current high valuation multiples across various metrics.

The decision to downgrade Equifax’s stock rating and lower the price target is justified by the analysts’ application of a lower target multiple. They now apply approximately 22 times the forecasted adjusted EPS for fiscal year 2027, discounted by 10%, which equates to around 27.5 times the adjusted EPS for fiscal year 2026. This adjustment in the valuation multiple is influenced by concerns over tariff uncertainty, macroeconomic risks, and potential challenges facing Equifax’s Government business.

Barclays’ previous price target of $325 was based on a multiple of roughly 27 times the forecasted adjusted EPS for fiscal year 2027, also discounted by 10%. The comparative multiples for peers in the credit bureau and employment/workforce solutions sectors were approximately 23 times and 30 times, respectively, indicating a more conservative stance in the current assessment.

Equifax’s stock movement will likely be closely watched by investors following these updates from Barclays, as the market processes the implications of the revised rating and price target.

In other recent news, Equifax Inc (NYSE:EFX). reported its Q4 2024 earnings, revealing a slight miss in revenue expectations while slightly exceeding earnings per share (EPS) forecasts. The company reported an EPS of $2.12, just above the expected $2.11, but revenue fell short at $1.42 billion compared to the forecasted $1.44 billion. Despite the revenue miss, Equifax raised its dividend by 50% and is considering share buybacks. RBC Capital Markets upgraded Equifax’s stock rating to Outperform with a target price of $300, citing anticipated mortgage recovery and FICO price increases as factors for revenue growth. The firm also highlighted Equifax’s strategic advancements in cloud migration and its potential for significant margin expansion. Meanwhile, NCR (NYSE:VYX) Atleos Corporation announced the appointment of Traci Hornfeck as its new Chief Accounting Officer, effective March 31, 2025. Hornfeck previously served as Chief Accounting Officer at Rollins, Inc. (NYSE:ROL) and has held significant roles at Equifax Inc. These developments underscore ongoing strategic shifts and financial maneuvers in the industry.

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