Equifax (EFX) kept its underlying fiscal 2026 guidance unchanged despite a Q1 beat due to increased geopolitical uncertainty, rate hikes and sluggish mortgage volumes, Morgan Stanley said in a Tuesday research report.
Although Q1 results were solid, volume softened in mortgage, auto, and card segments.
However, the brokerage said it expects improved consumer credit conditions, a more favorable regulatory environment, rate cuts, and mortgage upside over the coming years.
The company's long-term earnings growth potential is not priced into the stock.
While the near-term mortgage outlook remains uncertain, the credit bureaus should enter a multi-year upcycle trend, doubling EPS by 2028 compared with 2025, according to the note.
The brokerage said it reiterated its overweight rating on the stock and adjusted its price target to $243 per share from $244.
Price: $188.40, Change: $-4.02, Percent Change: -2.09%