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Equifax Maintained at Neutral - Analyst Blog
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 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.
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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