Broker snap: Seymour Pierce upgrades Experian on US mortgage market hopes

3rd Jan 2013 09:10

Seymour Pierce has upgraded its rating for information services company Experian from 'reduce' to 'add' on the back of increased hopes about the US mortgage market.In an article entitled 'BofA raises lending in new found confidence' on Thursday , the Financial Times reported that US lender Bank of America is ramping up mortgage and corporate lending after two years of focusing on capital levels and cost-cutting.Seymour analyst Caroline de La Soujeole said: "We believe this is noteworthy, showing returns to health in the US mortgage market. We believe mortgage-related revenues [at Experian] account for c.10% of US credit bureau revenue whilst the latter represented c.20% of group sales in FY12A."She said that Experian's shares are now trading at "more attractive levels", having underperformed the wider market by 6% over the past month.The target price for the stock has been raised from 1,000p to 1,100p, equivalent to a 2012 price-to-earnings ratio of 18.3, compared with Experian's closest peer Equifax.Shares were up 0.89% at 1,021p in early trading on Thursday.BC