Equifax Navigates Mixed Analyst Views as Third-Quarter Earnings Face Mortgage Headwinds
Equifax recently posted stronger third-quarter profits and expanded margins, but analyst views remain split over valuation and projected declines in mortgage inquiries.
Equifax Inc. has drawn mixed reactions from Wall Street following its third-quarter performance, as market watchers weigh solid earnings delivery against ongoing drag from the mortgage sector. An evaluation published by Yahoo Finance noted that the credit bureau trades at a price-to-earnings multiple of 27.7x. That level stands slightly above the peer average of 26.7x and the broader Professional Services sector average of 22.3x, leaving the valuation close to its estimated fair benchmark after five years of a 33.4% decline in the share price.
Analyst sentiment shifted recently when RBC Capital downgraded the stock from Outperform to Sector Perform while lifting its price target from $177 to $189. Analyst Ashish Sabadra attributed the move to a balanced risk-and-reward profile following recent gains. Sabadra highlighted persistent pressure from higher interest rates, potential consumer lending softness, and regulatory uncertainty surrounding a possible change from tri-merge to bi-merge mortgage credit reports, which could reduce annual revenue by about $80 million.
Company projections indicate U.S. mortgage credit inquiries will drop more than 20% in the fourth quarter of 2026 and decline by a high-single-digit percentage in fiscal 2027. Because non-FICO mortgage revenue generates strong incremental margins, inquiry declines weigh directly on earnings. RBC projected fiscal 2027 earnings of $9.00 per share, under the consensus projection of roughly $9.66.
In contrast, Argus upgraded Equifax from Hold to Buy with a $200 price target. Analyst John Eade noted the business has transitioned to steady growth supported by market-share gains from a new consumer credit-scoring model. Eade also cited a recent double-digit dividend increase as evidence of management confidence in cash flow, noting the shares traded at 17 times Argus's 2027 earnings forecast.
These analyst assessments followed third-quarter 2026 results that exceeded expectations. Adjusted earnings per share reached $2.26, beating the $2.20 consensus. Net income excluding extra items rose 32.1% to US$211.7m, and revenue climbed 9.6% to US$1,692.5m, helped by a 15% increase in U.S. mortgage revenue and a 20% jump in talent solutions. Management also doubled its productivity target for 2026 through 2028 to US$150m in run-rate savings, though high interest rates prompted a cut to full-year revenue expectations to about $6.66 billion.