Equifax Stock Gets Buy Rating from UBS with $360 Price Target
UBS recently initiated coverage on Equifax stock with a Buy rating and set a price target of $360.00. The firm's optimistic outlook is based on Equifax's potential to generate over $1 billion in revenue between 2024 and 2026, along with an estimated $700 million in EBITDA and approximately $4 in earnings per share as the mortgage sector stabilizes.
UBS believes that Equifax's significant mortgage exposure and the expectation of a higher capital return are currently not reflected in the stock's price. The firm highlighted that the market's implied FY26 adjusted EBITDA for Equifax is lower than UBS's projection, suggesting room for growth as the market has not yet priced in the full potential.
According to UBS, Equifax could see a 40%+ EBITDA margin, aided by a benefit from mortgage normalization expected in 2025. This improvement is anticipated to coincide with the completion of Equifax's transition to cloud computing, as well as an increase in active records within its Employment and Wealth Solutions segment.
Furthermore, Equifax is looking to recommence its share buyback program with a $520 million repurchase plan, representing approximately 1.3% of the company's market capitalization. UBS also notes that Equifax's free cash flow is likely to outpace net income, providing additional financial flexibility for the company.
In other news, Equifax has been showing strong financial performance and has entered into strategic partnerships to enhance its operations. The company's Q2 results exceeded market expectations, and its cloud transformation is nearing completion.
Investment firm Needham has reaffirmed its confidence in Equifax, increasing its price target and maintaining its Buy rating. Needham attributes this positive outlook to Equifax's quality of earnings, disciplined approach to capital allocation, and strong balance sheet.
Equifax's recent partnership with Workday aims to streamline employment and income verifications for Workday customers, improving the employee experience and freeing up HR departments.
Overall, Equifax's financial metrics, market performance, and strategic partnerships point to continued success and growth potential. Investors may consider the company's strong revenue growth, impressive gross profit margin, and stock performance when making investment decisions.
Analysis:
- UBS initiated coverage on Equifax stock with a Buy rating and set a price target of $360.00.
- Equifax's potential to generate over $1 billion in revenue between 2024 and 2026 is based on its significant mortgage exposure and higher capital return.
- The market has not fully priced in Equifax's potential, leaving room for growth towards the $360 price target.
- Equifax's strong financial performance, operational efficiency, and strategic partnerships position the company for future success in the market.