MIDAS SHARE TIPS UPDATE: Experian set to score highly after blip

Midas tipped Experian in February 2021 as a company that would benefit from an increasing reliance on data.

The company helps consumers around the world manage their credit scores so they can get credit cards and mortgages. The shares, tipped at £24.89, are now £28 plus.

The company says it has products for both good times and bad, with debt collection services and fraud management solutions, as well as the credit risk products we’re known for. It is also geographically diversified and operates in 30 countries.

Despite this diversity, Brian Cassin, CEO of Experian, chaired the full-year earnings report for the year ending March 2023, which disappointed markets this week.

Turnover increased by 9 percent, but operating profit fell by 11 percent. Growth for this year is now expected to be between 4 and 6 percent, which is lower than analysts had hoped.

Less credit is bad for Experian, and US banking problems, which account for nearly 70 percent of company revenue, have led to a lack of confidence in the industry and a slowdown in lending. That said, Experian has not been directly affected by bank failures.

There are also other bright spots. Regions like Latin America are seeing growth, with more people wanting credit reports and scrutinizing their credit data. Analysts have adjusted their forecasts based on weaker-than-expected data, but many still see upside.

Midas verdict: Experian is hard to value, but the stock has certainly struggled lately. While credit remains tight, the company will struggle to grow quickly, but it does have a diversified product portfolio and is well placed to benefit when current conditions begin to ease.

Bank failures in the US are making investors nervous, with share prices dipping this week, but after recovering, they still seem worth holding on to for the long haul.

Traded on: Main market ticker: EXPN Contact: experianplc.com or 0115 828 6738