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On Monday, Jefferies increased its price target for TransUnion (NYSE:TRU), a company specializing in credit reporting and related services, from $100 to $125, while maintaining a Buy rating on the stock.
The adjustment reflects a positive outlook based on the strength of the mortgage sector.
"We have raised our 3Q estimates for EFX, TRU, and FICO to above guidance and above consensus on the strength of mortgage, while leaving EXPN unchanged given its more modest exposure," said analysts at Jefferies.
Jefferies anticipates that Equifax (NYSE:EFX) and TransUnion will raise their full-year guidance. The view on Fair Isaac (NYSE:FICO) Corporation is more cautious, despite expectations for a fourth-quarter outperformance. This caution stems from high investor expectations for fiscal year 2025 related to business-to-business pricing for FICO scores.
Moreover, Jefferies has introduced its estimates for the years 2026 and 2027, signaling a longer-term perspective on the performance of these companies in the credit reporting and financial services sectors. The firm's outlook suggests confidence in the continued growth and profitability of these businesses, particularly in light of recent developments in the mortgage market.
In other recent news, TransUnion, a significant player in the credit information industry, reported an 8% revenue growth in the second quarter of 2024, surpassing expectations. This growth was primarily driven by substantial contributions from its financial services and emerging vertical segments, as well as double-digit growth in international markets. As a result, TransUnion raised its full-year guidance.
In addition to financial results, TransUnion has also declared a regular quarterly cash dividend of $0.105 per share for the second quarter of 2024, reflecting the company's ongoing commitment to return value to its shareholders.
On the analyst front, Baird and RBC Capital Markets have maintained an Outperform rating on TransUnion. Baird increased its price target from $94.00 to $104.00, and RBC raised theirs to $106.00 from $85.00. UBS initiated coverage on TransUnion with a Neutral rating and a price target set at $110.00, indicating a possible equilibrium in the stock's valuation.
TransUnion also faced a penalty of $312,000 imposed by the U.S. Securities and Exchange Commission (SEC) due to breaches of whistleblower protection regulations.
InvestingPro Insights
TransUnion's recent performance aligns with Jefferies' optimistic outlook. According to InvestingPro data, the company's revenue grew by 7.52% in the most recent quarter, with a robust gross profit margin of 60.79%. This solid financial performance is reflected in the stock's strong market performance, with a 37.46% price return over the past three months.
InvestingPro Tips highlight that TransUnion has raised its dividend for 3 consecutive years, indicating a commitment to shareholder returns. Additionally, analysts expect net income growth this year, which supports Jefferies' positive stance on the company.
For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips for TransUnion, providing a deeper understanding of the company's financial health and market position.
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