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Experian is a global business services company, operating in four main areas: Credit Services; Decision Analytics; Marketing Solutions; Interactive. The group is perhaps best known for its credit checking operation that enables consumers to identify their credit score. Headquartered in Dublin, Experian was formerly part of the GUS group until being demerged in October 2006.

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Brokers views:

.... 7 September 2007

Analysts at Deutsche Bank Securities maintain their "buy" rating on Experian while reducing their estimates for the company. The target price has been reduced from 723p to 614p. In a research note published yesterday, the analysts mention that the recent decline in Experian's share price seems to be overdone, despite a rise in risks associated with the company. The consumer credit markets are currently much more resilient than is believed by the market, the analysts say. The EPS estimates for 2008 and 2009 have been reduced by 4% and 9%, respectively.

17 August 2007

Goldman Sachs reiterates its buy stance with price of 665 pence. In a note published this morning, Goldman Sachs said that Experian has underperformed the FTSE 100 by 15% since its de-merger from GUS at the end of 2006, and is at the bottom of its trading range. The broker added that Experian is less cyclical, more cash generative and has greater cross-selling and balance sheet opportunities than many investors believe.

31 July 2007

UBS says it is a complex business that needs more detailed analysis. Having done this it has raised its price target to 750p from 710p and remains a buyer.

16 July 2007

Citigroup describes the firm as the curates egg as it restates its buy and 680p a share price target. Broker says: We slightly downgrade our profit forecasts to reflect slightly lower organic growth forecasts in the higher margin areas, partly offset by the small positive effect of moving our currency assumption to $2.02 from $1.99.

12 July 2007

Numis ascribes a take-out price of 720p, but reckons the shares are only worth 670p on fundamentals. As for the trading statement, it says: Although the company has made a good start to the year, it is still early days and for the time being we are likely to keep our forecasts broadly unchanged. For 2008 we are expecting PBT of 425m giving EPS of 32.5p, rising to 2009 PBT of 487m giving EPS of 37.2p.

27 June 2007

Deustche Bank lifts its price target to 723p from 701p after the Serasa deal. Broker says buy.

27 June 2007

Upgraded to buy from neutral with a price target of 710p a share, up from 680p.

26 June 2007

The acquisition of a 65% stake in Brazils Serasa gets the thumbs up. While multiple - 26 times EBIT - seems a bit steep, the rationale looks good. Gives the group 60pc of the credit checking market in one of Latin Americas largest economies. Merrill Lynch and Panmure both keep their buy recommendations.

13 June 2007

Morgan Stanley has initiated coverage of the credit checker with an overweight recommendation and 732p a share price target.

12 June 2007

Deutsche Bank has initiated the credit checker as a buy with a 710p a share price target.

24 May 2007

Citigroup has raised its recommendation to buy from hold and upped its price target to by a quid to 680p after results yesterday.

23 May 2007

Not much to say. Cazenove restates its in-line recommendation after results. It says: We feel a glacial de-rating may continue, but we feel there is not enough downside for a large trade; we do not think -15% underperformance is likely as we feel at this stage that estimates are safe and that new buyers would enter at above the 08E PE of 14.4x that -15% underperformance implies.

18 May 2007

Killick & Co has launched what it calls a tactical buy on Experian. I let the broker explain: The company, which demerged from GUS in October 2006, has built up a suite of proprietary databases and related services which we believe represent a substantial barrier to entry.It is also generating impressive rates of growth, which we believe are sustainable: in 2H07 (March year-end) sales are expected to have grown by 12% on a constant currency basis, of which 8% is organic.

19 April 2007

Goldman Sachs lifts the credit checkers price objective to 672p from 651p and keeps it on the conviction buy list. Says both UK and US credit businesses are doing well, which more than makes up for the poor performance of the firms Lower My Bills division.

17 April 2007

Credit Suisse restates its outperform and 700p a share price target after the figures today. Broker says: The key metric is the group organic growth rate which was reported at 8%, versus our estimate of 9%. This compares to 9% reported in Q3, which would suggest c7% organic growth in Q4, reflecting a weak performance in LowerMyBills.

15 March 2007

Citigroup goes to hold from sell after the shares fell in the wake of the sub-prime lending scare in the US. Only a small proportion of its business is in so called trailer park loans, but the mere mention is enough to unnerve skittish investors. Broker says: With the fall in the stock over the last month, the shares have reached our target price. Given the FCF yield support, 5.7% for 2008E, we move to Hold/ Medium Risk but keep our target price at 580p.

15 January 2007

Citigroup restates its sell advice with a 580p price target.

9 January 2007

Goldman Sach initiates the credit checker as a buy. Reckons US mortgage market concerns overdone as is the fact it has made acquisitions at some fairly racy multiples. Broker says: 'Its underleveraged balance sheet and excellent cash generation also mark Experian out as a potential LBO candidate, in our view. We initiate with a Buy recommendation and a 12-month, APV and multiples-based price target of 651p.'

Read full article

Global technology company Experian has acquired financial software specialist N4 Solutions as part of plans to develop insurance and wealth management capabilities.

N4 Solutions currently provides technology for the sale of mortgages, general insurance and financial planning and uses the Experian credit services to give immediate decisions on mortgages. It provides technology for Barclays, Nationwide, Intrinsic Financial Services and the Portman Building Society.

The acquisition will see Experian merge N4 Solutions with its existing mortgage group to create new division within its Consumer Business department. This sector will looks at developing technology in insurance and wealth management. Steve Jones, chief executive of N4 Solutions will head up the new division.

Tiku Patel, managing director of Experian UK & Ireland said: With N4 Solutions skills base and deep mortgage sector knowledge, it is a great strategic fit with Experian, with clear synergies with our client base and core credit decisioning solutions to create a full solution covering risk management.

Jones said: Together, we can deliver a unique and innovative proposition to meet the growing demand for sophisticated, integrated systems driven down by legal compliances, the desire for flexibility and speed of process, changing consumer behaviours and opportunities to reduce cost.

Few recents articles highlighting the value to be found in this stock.


Daily Express:       EXPERIAN IN BRAZIL COUP

Credit-checking giant Experian yesterday stepped up its international expansion with the 600million takeover of Brazils Serasa. The FTSE 100 group, formerly part of the GUS retail empire, holds financial information on almost everyone in the UK and has been seeking acquisitions overseas.

Chief executive Dan Robert said: The acquisition of Serasa represents a unique opportunity for Experian. It was the last prize to be had in our industry.

It leaves the group controlling three of the worlds five largest credit bureaux and takes it into one of the earths most populous countries. Experian is paying $1.2billion for a 65 per cent stake in Serasa, owned by a consortium of Brazilian banks. It has an option to take full control after five years. Serasa, founded in 1968, has an information database covering 161million
Brazilian consumer records. It propels us to a leading position in one of the most attractive growth markets for credit products globally, added
Robert.



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The Sunday Times' Grant Ringshaw tips Experian. He says: 'Barely a week passes without a rumour of another private-equity bid for Experian, the data and credit-checking company. The logic is impeccable private-equity bidders attracted by Experian's strong cashflows made approaches and were rebuffed before the group was demerged from GUS last October. Meanwhile, in little over a month, three of Experian's international rivals have been snapped up by private-equity predators.

But there are other reasons to hold the shares. Experian's management has not been distracted, last week delivering a 16% rise in full-year earnings before tax and interest.

Experian is also on the hunt for deals it has about $1.4bn to spend, but must be careful not to overpay. There is also a good growth story as it expands into India, China and Latin America. At 18 times next year's earnings, the shares are reasonably priced.



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'Times' - Nick Hasell: Tempus - Diversifying Experian shakes off the fallout from the sub-prime crisis


It is not just banks and hedge funds that have been suffering from the fallout from the US sub-prime mortgage lending downturn. Credit reference agencies have been caught up in it too.

That much was evident from yesterdays first-quarter update from Experian, the 6.5 billion business information group spun-off from GUS last October. Sales at LowerMyBills, its US online lead generation service, which directs customers from search engines to potential loan providers, saw its sales fall 20 per cent year-on-year, a sharp acceleration from an 8 per cent drop in the previous quarter.

But the impact on Experian should not be overstated. The company says the US sub-prime market has now stabilised, meaning that the three months to June 30 should prove the low point. It has also been busily diversifying away from sub-prime to prime and credit card-based lending, such that the former has fallen from 85 per cent as a percentage of LMBs sales to 70 per cent now. Based on the current pipeline, that proportion should fall to 50 per cent in the second half of the year.

More to the point, LMB accounts for only 2 per cent of Experians sales. The rest of the companys interactive businesses continue to grow strongly, such that, despite the drag of LMB, the divisions organic sales rose by 10 per cent.

There was little to disturb elsewhere in the statement. Underlying growth across the group was 7 per cent in the first quarter, in line with forecasts and matching the pace of the previous quarter. Further, Experian continues to predict a pickup in sales in the second half.

But yesterdays update also indicated the extent to which Experian is insulated from any slowdown in consumer finance. Despite a clampdown by high street banks on unsecured lending, underlying sales in the UK and Irish Republic were up 6 per cent year on year. It seems that, rather than concentrating on customer acquisition, banks are spending more time cross-selling products, collecting credit and reviewing their loan portfolios more frequently. Ironically, these activities create demand for Experians services that are typically higher margin than those for straightforward loan origination. Elsewhere, Experian has just completed the $1.2 billion purchase of a 65 per cent stake in Serasa, Brazils biggest provider of consumer credit data. Here, sales are rising at 20 per cent a year, while the countrys demographics 34 per cent of its 190 million population are under 19 promise long-term sustainable growth.

But Experian remains something of an oddity within the FTSE 100, hampered by a lack of domestic peer group comparisons the US, by contrast, has the likes of Equifax, Fair Isaac and Harte Hanks and poor investor understanding of what is a complex business. That means that, at 19 times 2007 earnings, Experian is undervalued for a company with strong cash flow and high operational gearing. All the more so given recent private equity takeovers of rivals Acxiom and First Data that would also appear to make Experian vulnerable to similar approaches. Buy at 616p.




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Recent article from The Sunday Times

The Sunday Times' Grant Ringshaw tips Experian. He says: 'Barely a week passes without a rumour of another private-equity bid for Experian, the data and credit-checking company. The logic is impeccable private-equity bidders attracted by Experian's strong cashflows made approaches and were rebuffed before the group was demerged from GUS last October. Meanwhile, in little over a month, three of Experian's international rivals have been snapped up by private-equity predators.

But there are other reasons to hold the shares. Experian's management has not been distracted, last week delivering a 16% rise in full-year earnings before tax and interest.

Experian is also on the hunt for deals it has about $1.4bn to spend, but must be careful not to overpay. There is also a good growth story as it expands into India, China and Latin America. At 18 times next year's earnings, the shares are reasonably priced.

THURSDAY 26TH JULY 2007

SHARES MAGAZINE

Trading Plays:
*Buy - Experian (EXPN.L).

These shares could be doing well tommorw, they will be my tip.
Recomended in last weeks shares mag at a higher price, good short term price

I agree Tonker, a good one to tuck away and watch develop. Held these since the GUS split. Very strong management.

Considering the brokers recommendations along with all the positive news-flow - AND the clear possibility of a bid, the present share price is ludicrously low.

good company - good price -good value

Agreed - Agreed - Agreed!

....and agreed some more !!!!

With the share price so low this is definitely my stock of the moment. Interim results are end of next month and with such a well respected management team you can be reasonably sure that the share price will be given a new injection of life !!

tipped this one to go higher

I can't help feeling that a very strong surge in the share price is immanent. There was also talk of a bid for Experian a short while ago and at the present price there could well be a follow-up to this shortly.

This is a cracking company with top management team and tons of promise. I'm not ramping it - just take a look around at what any qualified reporter says. To clarify the present oo-ah re credit raters, Experian has no connection with credit rating whatsoever and is merely engaged in a credit checking operation that simply enables consumers to identify their credit score.

Here's what Goldman Sachs said on Friday;

"Goldman Sachs reiterates its buy stance with price of 665 pence. In a note published this morning, Goldman Sachs said that Experian has underperformed the FTSE 100 by 15% since its de-merger from GUS at the end of 2006, and is at the bottom of its trading range. The broker added that Experian is less cyclical, more cash generative and has greater cross-selling and balance sheet opportunities than many investors believe."

What is the reason for the steady drop during July/Aug?

Harrycat, there is no valid reason - which is why Goldman Sachs is saying it is undervalued.

I agree that this is a solid stock, but if the current downturn in the sp is due to the downturn in the stock market, then there may still be further to fall for both.

......and if the market goes UP -as it now seems to be doing - then the sp will rise, and probably quite dramatically.