On Friday, Baird increased its price target for TransUnion (NYSE:TRU), a major player in credit reporting, from $94.00 to $104.00 while maintaining an Outperform rating on the stock.
The firm highlighted TransUnion's return to good organic growth, noting another quarter where the company's performance exceeded guidance and consensus expectations.
The analyst pointed out that TransUnion achieved an 8% organic revenue growth in a challenging U.S. consumer credit environment, which underscores the company's solid structural growth. The firm also noted the potential for the U.S. and U.K. consumer credit markets to reach or near a positive turning point.
Baird emphasized that TransUnion is beginning to see the benefits of its expense and productivity program, with more improvements anticipated in the future. Additionally, the firm expects that TransUnion will experience increased benefits from its product cycle due to technological initiatives and the integration of products and capabilities following acquisitions.
The firm's outlook for TransUnion is optimistic, with expectations of continued growth. Baird also addressed key concerns affecting the company, suggesting that despite these issues, TransUnion's relative valuation remains highly attractive at 19 times the projected adjusted earnings per share for 2025.
In other recent news, TransUnion has experienced notable developments in its financial performance and strategic direction. The company reported an impressive 8% revenue growth in the second quarter of 2024, surpassing expectations.
This growth was primarily driven by significant contributions from its financial services and emerging verticals segments, as well as double-digit growth in international markets. As a result, TransUnion has raised its full-year guidance.
RBC Capital Markets has also revised its outlook on TransUnion, raising the company's share price target to $106.00, up from the previous target of $85.00. The firm maintained its Outperform rating on the stock, reflecting a positive stance on the future performance of TransUnion's shares. This adjustment follows TransUnion's demonstrated ability to achieve robust revenue growth amidst a downturn in consumer lending.
Despite overall growth, certain segments like collections, tenant, and employment businesses have seen a decline. Adjusted EBITDA margin for Q3 is also expected to decline. Nonetheless, strong growth in insurance, public sector, tech retail, e-commerce, and media verticals, along with positive results from TruValidate fraud prevention suite and FactorTrust alternative lending product, are promising signs for the company's future.
InvestingPro Insights
Following Baird's recent price target increase for TransUnion, investors may further contextualize the firm's outlook with real-time data and insights from InvestingPro. TransUnion has demonstrated a strong financial posture, with a market capitalization of approximately $16.28 billion and a notable gross profit margin of around 60.79% over the last twelve months as of Q2 2024. This impressive margin is a testament to the company's efficient operations and aligns with Baird's positive assessment of its structural growth and productivity initiatives.
InvestingPro Tips highlight that TransUnion has raised its dividend for 3 consecutive years, indicating a commitment to returning value to shareholders. Additionally, the company's liquid assets surpassing short-term obligations suggest a robust liquidity position, which could reassure investors of its financial resilience. For those seeking a deeper dive into TransUnion's financial performance and future prospects, InvestingPro provides a comprehensive list of additional tips, including analysts' earnings revisions and profitability forecasts.
Investors interested in leveraging these insights for a more informed investment strategy can use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. With 11 additional InvestingPro Tips available, the platform offers a wealth of data and analysis to help users make more data-driven decisions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.