Experian rallies again as Citigroup hails inflection point

Shares in information services company Experian rallied for the second day in a row, after Citigroup lifted its price target on the stock by 9% to 1,340p to reflect higher earnings and the re-rating of the broader business services sector.

The broker said the results brought important validation of its view that Experian can still grow solidly in Brazil despite contracting consumer and business credit issuance and that its management is genuinely committed to shareholder distribution.

It also said the results show the Decision Analytics division has found a margin trough after eight years of decline.

Citi forecasts Experian to return around 6% of market cap to investors in full year 2016 while delivering 4% underlying organic EBITA growth.

It also thinks organic EBITA growth could double to 7-8% in 2018 as organic growth accelerates to around 6% and margin leverage returns.

“This combination of high capital return and defensive structural growth is rare not only in Business Services, but across the wider equity market,” the bank said.

The bank kept its ‘buy’ rating on Experian.

At 1455 GMT, shares were up 3.3% at 1,226p.