Citi downgraded its stance on Experian on Wednesday to ‘neutral’ from ‘buy’, arguing that cyclical headwinds are likely to make it difficult for the North American data business to deliver consensus FY23E organic growth of 8.2%.
“In an environment in which US housing transactions reduce year-over-year, we think 4% is more reasonable,” it said.
“With our group adjusted profit before tax of $1,707m circa 2% below Visible Alpha consensus at $1,743m, we do not believe that consensus earnings estimates can continue to rise, driving the downgrade.”
Citi said it continues to view the credit-checking company’s cash generative nature and strong track record of organic growth as attractive, and see upside to FY23E consensus in the Latin American business.
At 0955 BST, the shares were down 3.1% at 2,972p.
