Equifax Feels Credit Market Issues

Equifax Inc. (EFX - Analyst Report) is finding new avenues for growth in the International, Personal, and Commercial Solution businesses. The company's growing reliance on subscription revenue provides a steady revenue stream, and the TALX Corporation acquisition is accretive to earnings.

However, continued weakness in mortgage activity resulted in a decline in mortgage related revenues, thereby softening its U.S. Consumer Information Solution business. Given its sensitivity to the credit market, we maintain a Hold recommendation on the shares.

Equifax is well-positioned to benefit from its industry leadership, heightened consumer concern regarding identity theft, and strength in international markets. While Equifax's core business remains solid, the company is driving growth through new products and international expansion, which is posting healthy top-line growth on solid volumes. Equifax is also driving growth by actively managing its business portfolio.

Shares of Equifax are currently trading at a P/E multiple of 14.2x our 2008 EPS estimate of $2.54. This multiple is a discount to its peer group. We believe that the stock will perform in line with the broader equity market over the near-term. Our target price of $38 represents a multiple of 15.0x our 2008 EPS estimate, a discount to the industry mean.

Read the full analyst report on EFX