We have retained our Neutral recommendation on information
). 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
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
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.
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
Fidelity National Information Services Inc.
). All these companies carry a Zacks Rank #2 (Buy).
EQUIFAX INC (EFX): Free Stock Analysis Report
EVERTEC INC (EVTC): Free Stock Analysis
FIDELITY NAT IN (FIS): Free Stock Analysis
MASTERCARD INC (MA): Free Stock Analysis
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