Citi Gives Equifax Buy Rating, Sees ‘Underpriced’ Mortgage Recovery
November 21, 2023
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Equifax Inc ($NYSE:EFX). is a leading global data, analytics, and technology company that provides innovative data solutions to help businesses and consumers make better financial decisions. Recently, Citigroup has given Equifax a Buy rating due to their potential for a mortgage recovery. Citi believes that the market is underestimating the company’s progress in this area. Citi’s report states that Equifax’s mortgage solutions are “underpriced” when compared to their competitors. They believe that the company has strong competitive advantages due to their experience in the industry and their expertise in providing reliable data and analytics solutions.
Citi also highlighted the fact that Equifax has grown rapidly and has the ability to scale quickly in order to meet customer demands. The analysts at Citi believe that Equifax is well positioned to capitalize on the increasing demand for mortgage services. They also noted that the company is well-positioned to benefit from the current digitalization of the mortgage industry, which is expected to drive increased demand for data analytics. With their strong competitive advantages, Citigroup believes that Equifax will be able to capture a larger share of the market and enjoy significant growth in the coming years.
Share Price
On Monday, EQUIFAX INC stock opened at $205.2 and closed at $209.5, up by 2.1% from prior closing price of 205.2. The reason for the sudden bump in its stock performance was a buy rating given to the company by global investment bank and financial services company, Citi. Citi analysts attributed the potential future rise in Equifax’s stock to its mortgage recovery prospects, citing that the company is “underpriced”.
They argued that with a strong recovery in the housing market, it would benefit Equifax given its position within the mortgage industry. Furthermore, Citi believes that if Equifax is able to capitalize on the opportunities presented by the recovery of mortgages, it could be a good long-term investment. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Equifax Inc. More…
| Total Revenues | Net Income | Net Margin |
| 5.14k | 521.1 | 10.1% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Equifax Inc. More…
| Operations | Investing | Financing |
| 1.12k | -877.1 | -79.3 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Equifax Inc. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 12.35k | 7.86k | 34.84 |
Key Ratios Snapshot
Some of the financial key ratios for Equifax Inc are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 9.5% | 16.0% | 17.8% |
| FCF Margin | ROE | ROA |
| 9.9% | 13.4% | 4.6% |
Analysis
GoodWhale has conducted a study to examine the welfare of Equifax Inc., a company classified as a ‘cow’ in the Star Chart. This type of company typically has a track record of paying out consistent and sustainable dividends. As such, this company may be of interest to investors who are looking for a steady income stream from their investments. Furthermore, Equifax Inc. has a high health score of 8/10, which indicates that it is capable of sustaining future operations in times of crisis. This is largely due to its strong cashflows and debt levels, as well as its moderate profitability. Although its growth is only rated as medium, its dividend payouts and profitability make up for it. The only area where Equifax Inc. is weak is in its asset levels. More…
Peers
Equifax Inc. is a credit reporting agency. Its main competitors are TransUnion, Mills Music Trust, and Experian PLC. All three companies compete for credit report customers and business from creditors.
– TransUnion ($NYSE:TRU)
TransUnion is a credit reporting company. It compiles credit information on consumers and businesses, which is used by lenders to make credit decisions. The company also provides other services such as fraud detection, identity theft protection, and credit counseling. TransUnion has a market cap of 10.77B as of 2022, and a Return on Equity of 8.48%.
– Mills Music Trust ($OTCPK:MMTRS)
Mills Music Trust is a publicly traded music royalty company. The company owns the rights to a large catalog of music, which it licenses to businesses and individuals for use in their products and services. Mills Music Trust has a market cap of 10.14M as of 2022. The company generates revenue by licensing its music to businesses and individuals for use in their products and services.
– Experian PLC ($LSE:EXPN)
As of 2022, Experian PLC has a market cap of 24.89B and a Return on Equity of 34.45%. The company is a global information services company that provides data and analytical tools to its clients. Experian helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making.
Summary
Equifax Inc. has recently been given a ‘Buy’ rating from Citi, primarily due to the company’s promising mortgage recovery prospects. Citi analysts believe that the market has underpriced the potential of Equifax’s recovery. Equifax has made strong investments into their own technology and resources in order to analyse consumer credit data and provide solutions to their customers.
They have also experienced significant growth in their international markets, allowing them to expand their customer base. Despite some headwinds in the form of increasing competition and debt levels, Citi remains confident in Equifax’s ability to generate long-term success and make a positive return for investors.
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