Credit Suisse lifts Experian price target

Credit Suisse upped its price target on credit-checking firm Experian to 3,600p from 3,450p on Monday as it lifted its earnings per share estimates by 2-4% for FY22-23 to reflect strong growth in Brazilian and North American B2C.

The bank, which rates Experian at ‘outperform’, said the Brazilian B2C market is a new and rapidly growing business that can add significantly to group growth.

"We estimate an addressable market of $2.3bn compared to $40m revenues in FY20 highlighting the opportunity set in a country where Experian already is the clear leader in the B2B market," it said.

"We estimate that new products in North American B2C (Identity and Credit matcher) have grown revenues by 6x in the two years to FY20 but are just scratching the surface of markets that Experian estimate to be worth $13bn.

"We estimate that these nascent consumer markets in Brazil and North America can add 2.4% compound annual growth rate to group organic growth over the three years."

CS said this builds on leading B2B data and decisioning operations that collectively can generate 13% cash backed EPS compound annual growth rate over the three years to FY24, on its forecasts.

"Multiples are above historic averages but in a low interest rate environment still not, in our view, reflecting the sustainable, high return growth enabled by very strong core, internal innovation and vast new addressable markets."

At 1335 BST, the shares were up 2.3% at 3,083.74 p.