Equifax is one of the three major US credit bureaus. It collects and analyzes consumer and business credit data, as well as employment and income verification data used by lenders and employers.
Present situation
Equifax published results in line with expectations but lowered its revenue outlook. The share price was nonetheless supported by an upgrade to Buy from Argus Research and a series of confirmed positive recommendations.
Opportunity analysis
Part of Equifax’s revenue is tied to lending volumes, especially mortgages, which remain sensitive to a 10 year US Treasury yield around 5%. The forward case rests on less rate sensitive businesses, such as workforce and income verification, and on new data products. Points to watch: mortgage volumes, growth in verification services and the trajectory of interest rates.
Investor outlook: Neutral
A high quality data business whose short term growth depends on rates. A more meaningful decline in long term yields would be the main catalyst for a stronger case.
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