Turning Neutral on valuation
TransUnion delivered another strong quarter and continues to generate faster growth than peers. We see clear upside potential to Street estimates given the recent accretive acquisitions and increasing confidence that the company can sustain its organic growth. However, we also believe these factors are already reflected in buyside expectations, comps get tougher from H2, and we view valuation as relatively full at current levels particularly as mean reversion in the market is likely longer term. Hence, we are downgrading the stock to Neutral while increasing our PT to $82 with 11% upside. Our 12m price target requires a 26x PE multiple.TransUnion is an information and insights company. The company provides consumer reports, actionable insights and analytics such as credit and other scores, and decisioning capabilities to businesses. The company has the following reportable segments: United States Markets, which provides consumer reports, actionable insights and analytics such as credit and other scores, and decisioning capabilities to businesses; International, which provides services similar to its United States Markets segment to businesses in select regions outside the United States; and Consumer Interactive, which provides solutions that help consumers manage their personal finances and take precautions against identity theft.
Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.
Atlantic provide order execution through a wide range of DMA products and algorithmic trading suites.
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