Broker snap: Experian given a boost by emerging markets

3rd Feb 2011 13:29

RBS expects credit-checker Experian to benefit from the global macroeconomic recovery and anticipates organic revenue growth accelerating over the next two years. "Experian derives 20% of group revenues from emerging markets such as Brazil, India and Russia. We believe the recent decision by the Brazilian Senate to permit the use of positive credit data enhances Experian's medium-term growth prospects in that region," the broker says.Despite the US economic recovery leading to a positive earnings momentum, the broker notes that the group trades at an 18% discount to its historical peak price-earnings ratio.RBS expects revenue growth to accelerate from the 7% reported in the first half of 2011 to 8% in 2012, and 9% in 2013.The broker initiates coverage with a 'buy' and target price of 900p.