Morgan Stanley raised their stock price forecast on TransUnion to $119 from $115, reiterating an ‘Overweight’ rating on the consumer credit reporting agency and said the company will outpace its 7-9% organic growth guidance for the year, following a deeper dive into the state of the company’s business lines.

Last month, Chicago, Illinois-based company updated its second-quarter 2021 earnings per share outlook to 0.890-0.920, well above the Wall Street consensus estimates of $0.790.

TransUnion forecasts revenue in the range of $744 million to $754 million, better than the market expectations of $691.63 million. The company also updated its full-year 2021 EPS outlooks to 3.450-3.580 per share.

“We see positive data points across non-mortgage financial services, emerging verticals, and consumer interactive that can drive upside to TRU’s 7-9% growth guidance for the year. We model 10% growth and are now 2% above cons on revenue and 3% above on adj. EBITDA,” noted Toni Kaplan, equity analyst at Morgan Stanley.

“We are increasingly bullish on the recovery of TRU’s non-mortgage financial services business given the positive outlook around consumer spending.”

TransUnion shares rose about 11% so far this year. The stock ended 1.4% higher at $109.99 on Monday.

Eight analysts who offered stock ratings for TransUnion in the last three months forecast the average price in 12 months at $119.29 with a high forecast of $125.00 and a low forecast of $110.00.

The average price target represents 8.46% from the last price of $109.99. Of those eight equity analysts, seven rated “Buy”, one rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $165 under the bull scenario and $66 under the worst-case scenario.

“TRU is a best in class credit bureau that has an ample runway for growth driven by innovation, expanding in attractive markets (e.g. healthcare, insurance), extending its consumer reach (e.g. more indirect partnerships), and leveraging its global operating model (expanding its solutions to additional markets),” Morgan Stanley’s Kaplan added.

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“Management has demonstrated strong execution historically, showing its ability to grow above peers; TRU’s diversified verticals reduce risk and drive HSD growth in our model following a 2020 recession. The stock is trading at a 2x discount to Information Services peers, despite what we view as an intact growth runway in a post-COVID-19 environment.”

Other equity analysts also recently updated their stock outlook. Credit Suisse raised the target price to $120 from $115. Deutsche Bank lifted their price objective to $110 from $103 and gave the company a buy rating.

Truist upped their price objective to $120 from $100. Barclays boosted their target price to $120 from $110 and gave the stock an overweight rating.

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This article was originally posted on FX Empire


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