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Equifax Shares Hit 52-Week High

Zacks Equity Research

Shares of Equifax Inc. (EFX) hit a new 52-week high of $72.00 on Mar 12, eventually closing at $71.96. The closing share price represents a one-year return of 27.4% and a year-to-date return of 5.1%.

Some of the optimism surrounding the stock can be attributed to the company’s strong correlation to consumer and financial markets as well as its U.S. and European exposure, which is witnessing a gradual uptick. Moreover, improving mortgage environment could be a positive for the stock.

Moreover, management’s efforts such as strategic initiatives for product innovation, expansion of data assets through acquisitions and continuous share gains in North America were encouraging.

Apart from this, Equifax has been entering into partnerships to expand its product portfolio and boost market share. We remain encouraged by the company’s initiative to return cash to shareholders in the form of dividends. Management increased the quarterly cash dividend by 14%.  

Additionally, Equifax delivered mixed fourth-quarter results. While Equifax’s bottom line matched the Zacks Consensus Estimate, the top line fell short of the same. However, the company’s revenues increased on a year-over-year basis aided by strong growth across most its business segments.

The company also provided revenue and earnings forecast for the first quarter of 2014. Revenues are expected to range between $575 million and $588 million, while the Zacks Consensus Estimate stands at $583 million. Earnings are forecasted between 84 cents and 88 cents. The Zacks Consensus Estimate is pegged at 87 cents.

Moreover, the company expects to achieve 6% to 8% core growth during 2015. Improvement in the mortgage market and strategic acquisitions is also expected to be the growth catalysts for the company.

However, stiff competition from Automatic Data Processing Inc. (ADP) and Fiserv Inc. (FISV), and uncertainty in the mortgage sector are the near-term concerns.

Currently, Equifax carries a Zacks Rank #3 (Hold). Investors can consider a better-ranked stock like Micron (MU) which sports a Zacks Rank #1 (Strong Buy).

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