Mortgage Market Trough Likely To Benefit Equifax, Analyst Upgrades Stock
Portfolio Pulse from Shivani Kumaresan
BofA Securities analyst Heather Balsky upgraded Equifax Inc (NYSE:EFX) from Underperform to Buy and increased the price target from $164 to $300. The upgrade is based on the expectation of positive EPS revisions due to potential increases in mortgage originations and inquiries as interest rates ease. Equifax's stock has already risen 40% since the November 1 Fed meeting, and the analyst believes there is room for further growth. The new price target assumes an expansion of the earnings multiple from 21x to 27x, reflecting increased investor focus on the company's profitability potential for 2025. The Structured Finance team at BofA anticipates mortgage rates to drop from over 7% in 2023 to 6.0% by the end of 2024, which could lead to a 16-18% rise in originations. Equifax's USIS cloud transformation is also expected to contribute to wallet share gains over the next two years.
January 08, 2024 | 7:10 pm
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Equifax Inc upgraded by BofA Securities from Underperform to Buy with a new price target of $300, indicating a positive outlook on the stock due to expected mortgage market improvements and EPS growth.
The upgrade by BofA Securities is a strong positive signal for Equifax, suggesting that the analyst expects significant growth in the company's earnings and stock price. The anticipation of a mortgage market recovery and the potential for Equifax to gain wallet share through its USIS cloud transformation are key drivers for this optimistic outlook. The substantial increase in the price target reflects the analyst's confidence in the company's future performance, which could lead to increased investor interest and a short-term rise in the stock price.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100