Broker snap: Don't fear regulation at Experian, says Shore Capital

15th Jun 2011 16:25

Despite the share price of credit checking firm Experian falling on the back of regulatory concerns in the US; Shore Capital has assured investors that this is "not something to be feared".Reports have suggested that banking regulation in the US is set to be extended to credit bureaus operating in the country, which the broker thinks are likely to be correct."We believe that from 2012, Experian and its peers are likely to come under a similar regulatory umbrella to their clients in banking and financial services; this has yet to be implemented in law, however," said analyst Robin Speakman.The broker thinks that regulators are seeking transparency in the calculation and use of credit data, which highlights the "strategic value" of this data, both to individuals and finance companies/retailers, etc."We do not wish to underplay any threat to revenues and costs from changes to regulation, but we feel that change should be as much welcomed as feared as it may also provide opportunity for growth and development," Speakman said.Shore Capital still recommends to 'buy', and gives Experian a target price of 780p.---BC