Equifax Maintained at Neutral - Analyst Blog

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We have retained our Neutral recommendation on information services provider Equifax Inc. ( EFX ). On Jul 24, Equifax posted impressive second quarter 2013 results with the top and bottom lines surpassing the Zacks Consensus Estimate. But the fiscal 2013 guidance was a bit cautious, reflecting expected slowdown in mortgage activities and currency headwinds.

Equifax delivered a positive earnings surprise in the last quarter, with an average beat of 3.46% for the trailing four quarters. Currently, Equifax has a Zacks Rank #3 (Hold).

Why a Neutral Stance?

Equifax is gaining traction in its U.S. Consumer Information segment (driven by higher demand for Mortgage Solutions) as well as Workforce Solutions segment (Workforce Solutions have been selected by Center for Medicare & Medicaid Services for 5 years in order to verify income and other personal information of health insurance applicants).

We also believe that the acquisition of Trust ID in Jul 2013 will boost the performance of its North America Personal Solutions segment.

But we think that Equifax will continue to face stiff competition in Brazil (from Experian). Also, an expected drop in mortgage activity in the later half of 2013 could jeopardize the company's financials. Equifax predicts a higher interest rate and lower refinancing of debt during the second half of 2013. This would reduce new business generation for financial institutions and hence credit reports from Equifax may see lower demand.

Estimate Revisions

Over the last 30 days, 3 and 4 estimates moved up for fiscal 2013 and 2014, respectively while 2 estimates moved down each for fiscal 2013 and 2014. This has resulted in keeping the Zacks Consensus Estimate for 2013 and 2014 constant at $3.61 and $3.99 per share, respectively.

Other Stocks to Consider

Other stocks in the technology sector that are currently performing well include Evertec Inc. ( EVTC ), Fidelity National Information Services Inc. ( FIS ) and MasterCard Inc. ( MA ). All these companies carry a Zacks Rank #2 (Buy).



EQUIFAX INC (EFX): Free Stock Analysis Report

EVERTEC INC (EVTC): Free Stock Analysis Report

FIDELITY NAT IN (FIS): Free Stock Analysis Report

MASTERCARD INC (MA): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: EFX , EVTC , FIS , MA

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