UPDATE: Equifax (EFX) PT Lowered to $186 at Goldman Sachs Citing Mortgage Market Weakness
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Goldman Sachs analyst George Tong lowered the price target on Equifax (NYSE: EFX) to $186.00 (from $190.00) seeing near-term downside risk for the company due to an increasingly challenged U.S. mortgage originations outlook that is likely to weigh on intermediate-term revenue performance.
The analyst maintained a Neutral rating, stating "Mortgage-related revenue makes up ~45% of revenue in EFX’s USIS and EWS segments, which in turn comprise ~70% of total company revenue. We expect U.S. mortgage origination volumes to contract sharply in the second half of 2021 and remain in double-digit decline through 2023 due to a moderation in mortgage refinancing volumes in a rising interest rate environment. We reduce our 2021-2023 revenue and earnings forecasts and see downside risk over the next 1-2 quarters, while adopting a more balanced 12-month view that reflects improving core revenue growth and benefits from the company’s technology transformation program."
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