BMO Capital initiates Equifax stock with Market Perform rating

Investing.com - BMO Capital initiated coverage on Equifax (NYSE:EFX) with a Market Perform rating and a price target of $280.00 on Wednesday. The company, currently trading at $265.73, shows strong financial health according to InvestingPro metrics, with impressive gross profit margins of 56.4% and a market capitalization of $33 billion.

The research firm noted that Equifax has significantly expanded beyond its original credit bureau foundations through its Verifier business and Work Number Database, which BMO described as "the crown jewels of the portfolio." This expansion has contributed to a solid 7.1% revenue growth over the last twelve months, while maintaining a 55-year track record of consecutive dividend payments.

BMO Capital expressed caution regarding Equifax’s Mortgage business, which has faced constraints in the current higher interest rate environment as many homeowners remain locked into low rates or find themselves priced out of homeownership.

The firm’s estimates reflect cautious projections on mortgage recovery and Verifier growth, with BMO positioning its forecasts below consensus for future years.

BMO Capital observed that Equifax currently trades at parity with other companies in the Information Services (NASDAQ:III) sector.

In other recent news, Equifax has been the focus of several significant developments. BofA Securities downgraded Equifax’s stock rating from Buy to Neutral, citing limited advantages in the company’s cloud transformation and adjusting its earnings per share (EPS) estimates for 2025 and 2026. Meanwhile, RBC Capital maintained its Outperform rating, emphasizing Equifax’s completed cloud transformation and its potential for growth through AI solutions, even without a mortgage market recovery. UBS reiterated a Buy rating, expressing confidence in Equifax’s growth strategy and highlighting the company’s potential for international expansion and product integration. Stifel raised its price target for Equifax to $295, acknowledging the company’s progress in cloud transformation and improved client receptivity. Additionally, Equifax launched a new AI-powered credit score planning tool called Optimal Path, designed to provide consumers with personalized credit score improvement plans. The tool leverages Equifax’s cloud and AI capabilities to offer actionable guidance based on individual credit profiles. These developments collectively underscore Equifax’s strategic focus on leveraging technology and innovation to drive growth.

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