Experian shares rise as RBC upgrades to 'outperform' on growth prospect

Investing.com -- Shares of Experian Plc (LON:EXPN ) rose on Monday following an upgrade from RBC Capital Markets, which revised the stock's rating to "outperform" from "sector perform." 

RBC analysts cited several factors underpinning their bullish outlook, emphasizing strong mid-term growth prospects and improving macroeconomic conditions that are expected to drive a recovery in consumer lending and bolster revenue.

Experian (OTC:EXPGF )'s strong position in credit data and analytics, paired with strategic growth initiatives such as its Ascend platform and increasing traction in Brazil, played a central role in RBC's revised assessment. 

The brokerage noted that Experian's initiatives in sectors like insurance, healthcare, and auto, coupled with advancements in cloud migration, set the stage for margin expansion and innovation. 

Analysts flagged a revenue target of about $8 billion by FY2026, fueled by diversified regional and vertical growth strategies.

The broader economic environment also supports Experian's prospects, as RBC expects lending activity to pick up in 2025. 

Strengthening consumer services, including the integration of tools like Experian Boost and a growing base of 190 million global members, adds further weight to the company’s growth trajectory.

Additionally, Experian's expansion in emerging markets, particularly Brazil, continues to demonstrate accelerated growth. The company’s initiatives in debt renegotiation services and enhanced product offerings are resonating well, with consumer services in Brazil showing significant gains.

The stock's recent dip created what RBC analysts called an "attractive buying opportunity," suggesting a price target of 4,200 GBp, representing a notable upside from its current levels. 

Analysts anticipate that Experian's operating leverage and completion of cloud migration by FY2026 will also contribute to higher margins and free cash flow.

Source: Investing.com