Canaccord upgrades Experian after recent share-price decline

7th Nov 2014 10:32

Shares in Experian were continuing to rise on Friday, a day after the credit-checking firm's well-received first-half results, after Canaccord Genuity upgraded its rating for the stock from 'sell' to 'hold'.Experian said on Thursday that revenues were flat on a continuing organic basis in the first half, though currency movements and acquisitions contributed to reported sales growth of 5%. Margins, however, fell 40 basis points to 26.2%.Canaccord said that while the group's operating performance was "disappointing" during the first half, it was "compensated by a better than expected interest and tax charge".Meanwhile, Experian reduced its guidance for the full year, predicting only subdued growth in the third quarter before an improvement in the fourth. At the first-quarter stage, the company had anticipated a return to "more normal growth".Nevertheless, Canaccord said: "After a period of sustained relative and absolute under-performance we are moving our long-standing 'sell' recommendation up to 'hold'."We believe that there remains risk to forecasts, specifically in Latin America due to the weak Brazilian economy and US due to the changes in the consumer product line. However, the share price, following a series of earnings downgrades, has weakened to a point of fair value."The broker has lifted its target price from 858p to 928p, helping Experian's shares 3% higher to 1,029p on Friday, following a 6% surge the previous session.The stock was also boosted after Credit Suisse reiterated its 'outperform' ratings, JPMorgan Cazenove kept an 'overweight' stance, and Beaufort Securities, Deutsche Bank and Liberum Capital all retained recommended a 'buy'.