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On Friday, Citi updated its financial model for Equifax Inc . (NYSE:EFX) stock, leading to an increase in the company's price target from $304.00 to $331.00, while maintaining a Buy rating on the stock.
The adjustment comes ahead of the company's third-quarter 2024 earnings release, with the analyst citing slightly better-than-expected mortgage volumes as the primary reason for the revision.
The firm's analysis led to an enhancement of the third-quarter 2024 earnings per share (EPS) estimate, raising it from $1.90 to $1.94, which is approximately 3% above the consensus forecast by Visible Alpha. Additionally, the full-year 2024 adjusted EPS forecast was increased from $7.30 to $7.44.
The new target price of $331 reflects not only the modest upward revisions in Equifax's forecasts but also a broader valuation re-rating in the Business Services sector. The analyst noted an increase in the average enterprise value to earnings before interest, taxes, and amortization (EV/EBITA) multiple for the sector, which moved from 12 to 12.6 times.
Equifax, a global data, analytics, and technology company, is set to report its third-quarter earnings soon, and the updated forecasts by Citi suggest confidence in the company's performance. The revised price target indicates a positive outlook for Equifax's shares in the stock market.
In other recent news, Equifax Canada has appointed Ramon Yarde as Chief Data Officer, emphasizing the company's dedication to enhancing data services and promoting financial inclusion.
In the wake of this appointment, several investment firms have revised their outlook on Equifax. Oppenheimer raised its price target for Equifax to $315, citing expectations of benefits from high mortgage activity.
Jefferies also increased its price target for Equifax, reflecting a positive outlook on the mortgage sector. Equifax's Q2 results showed a 9% revenue increase, reaching $1.43 billion, and an adjusted EPS of $1.82, surpassing market expectations.
Needham increased its price target for Equifax to $350, while UBS initiated coverage with a Buy rating, projecting the company to generate over $1 billion in revenue between 2024 and 2026. These recent developments underline a positive outlook for Equifax in the financial industry.
InvestingPro Insights
To complement Citi's optimistic outlook on Equifax Inc. (NYSE:EFX), recent data from InvestingPro offers additional context for investors. Equifax's market capitalization stands at $35.12 billion, reflecting its significant presence in the data and analytics sector. The company's revenue growth of 7.98% over the last twelve months as of Q2 2024 aligns with Citi's positive view on the company's performance.
InvestingPro Tips highlight Equifax's impressive gross profit margins, which are currently at 55.63%. This robust profitability metric supports the company's ability to invest in growth and innovation, potentially justifying the higher valuation multiples noted by Citi.
Another InvestingPro Tip points out that Equifax has maintained dividend payments for 54 consecutive years, showcasing the company's financial stability and commitment to shareholder returns. This long-standing dividend history may be particularly appealing to investors seeking reliable income streams.
For those interested in a deeper analysis, InvestingPro offers 15 additional tips on Equifax, providing a comprehensive view of the company's financial health and market position.
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