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Cowen analyst says Equifax, TransUnion have strong growth prospects


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Cowen analyst says Equifax, TransUnion have strong growth prospects

Cowen analyst George Mihalos in separate March 30 notes initiatedcoverage of Equifax Inc.and TransUnion with "outperform"ratings on both companies.

Mihalos said his rating on Equifax reflects his view that thecompany is well positioned to see top-line and adjusted EPS growth. New businesswins and products, as well as nonprime credit expansion, could drive the companyto grow beyond consensus in the next two-to-three years, he said.

The analyst noted the company's position as the biggest globalconsumer credit bureau, which allows it to access consumer data to create new products,enter new markets, improve client wallet share and push revenue growth. Additionally,Mihalos said that Equifax's pipeline of business wins, its acquisition of Veda and steady credit demand inthe U.S. contribute to its potential to exceed its near-term growth targets.

Mihalos set his price target for Equifax at $126.00. His EPSestimates are $5.03 for 2016 and $5.72 for 2017.

The rating on TransUnion is based on its robust organic growthprofile, according to the analyst. Mihalos said the company has outperformed peerswhile diversifying end markets and expanding margins. He added that balance sheetdeleveraging and increasing demand for its credit analytics should contribute tofurther upside.

Additionally, Mihalos said that TransUnion has become a world-classanalytics company following a transformation, with a new suite of products drivingorganic revenue growth.

The analyst set a $30.00 price target and EPS estimates of $1.26for 2016 and $1.44 for 2017.