Equifax: Strong Q4 Beat, Rebounding Government Segment, and Undervalued Long-Term Earnings Power Support Buy Rating

Analyst Toni Kaplan of Morgan Stanley maintained a Buy rating on Equifax, reducing the price target to $244.00.

Toni Kaplan has given his Buy rating due to a combination of factors that highlight both operational strength and attractive valuation. Equifax delivered a notably strong fourth quarter, with revenue, adjusted EBITDA, and adjusted EPS all surpassing Morgan Stanley’s estimates, underpinned by robust 9% organic revenue growth that outpaced both the firm’s and the broader market’s expectations. A key driver was a meaningful rebound in the Government segment, which returned to solid double‑digit growth thanks to improved state penetration and better error-rate management, an important development given this segment’s size and strategic importance. Initial 2026 guidance, while mixed on EPS, came in slightly ahead on revenue versus prior projections, easing investors’ concerns after several years of more disappointing outlooks.

At the same time, Kaplan views Equifax’s long-term earnings power as underappreciated by the market. Even after modestly trimming the 2026 adjusted EBITDA forecast following model updates and assuming full legacy FICO mortgage flow-through, the analysis still points to substantial EPS growth potential over the coming years. The stock’s valuation, trading around 12x 2026 EV/EBITDA, is seen as compelling relative to that growth outlook, supporting the decision to maintain an Overweight (Buy) stance. Overall, the combination of better-than-expected recent performance, improving trends in core and government businesses, and discounted valuation underpins Kaplan’s positive recommendation on Equifax shares.

In another report released today, TipRanks – OpenAI also upgraded the stock to a Buy with a $193.00 price target.