Experian Plc (EXPGF) (GB:EXPN) is seeing its status as a stock market darling slip away as the rise of artificial intelligence creates a new list of winners and losers. On Monday, the company’s shares hit a two-year low, dropping over 3.4% in London trading. This latest dip brings the total decline for January to 13%, marking the worst monthly performance for the credit-scoring giant in four years and leaving it with a market value of roughly £26.9 billion.
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Analysts Debate AI Disruption Risks
The main reason for the recent sell-off is that “the stock has been weak as Experian has been considered to be an artificial intelligence loser,” according to Citigroup analyst Arthur Truslove. This label comes from the fear that AI can process data so efficiently that Experian’s massive library of credit information might become less valuable over time. This concern has already hit others in the industry, such as U.S.-listed Equifax (EFX), which saw its value drop by 15% last year.
Despite the falling price, most big banks still love the stock. The stock has been rated a Strong Buy, giving it a score higher than 90% of other companies on the FTSE 100. These supporters believe that instead of being replaced by AI, Experian will use the technology to launch more products and work faster with fewer people.
Experian CEO Touts AI Growth Potential
In its latest updates, Experian management has tried to change the conversation by focusing on how they are already using AI. CEO Brian Cassin recently told investors that “AI-driven automation and personalisation” is actually helping the company build closer relationships with customers.
However, the market isn’t fully convinced yet. Last week’s financial update showed decent growth, but it wasn’t enough to stop the stock from sliding further. While Arthur Truslove believes AI will “result in more new product launches driving faster growth,” many traders are still choosing to wait for more proof before they start buying the dip.
There Is Deep Uncertainty about the Future of Professional Services
The split between what analysts think and how the stock is trading shows a deep uncertainty about the future of professional services. If AI can automate the complex work of deciding who is a safe borrower, the barriers to entry that protect companies like Experian could start to crumble. This has led to a broader sell-off in European data and software firms as investors search for companies that are AI winners.
Even so, the company remains highly profitable and continues to raise its dividends for shareholders.
Is Experian a Good Stock to Buy?
Wall Street remains a big fan of Experian, with TipRanks reporting a “Strong Buy” rating and seven straight Buy calls over the last quarter. Analysts have set an average 12-month price target of $57.61, which means the stock could climb another 40% if it hits those goals.
