FICO decline due to news ‘market is misinterpreting,’ says Jefferies

Jefferies notes that FICO (FICO) shares have declined nearly 20% over the past two days on news the firm believes “the market is misinterpreting.” The firm views TransUnion (TRU) and Equifax (EFX) lowering the price of VantageScore 4.0 to $1 per score as “more of a marketing effort than a strategic maneuver” and views the possibility of a VS4 securitization pilot program at one of the GSEs as “nothing more than standard operational procedures around plumbing,” the analyst tells investors. The firm, which also argues that the $1B debt raise is “a positive as more aggressive share repurchases are likely,” sees the risk/reward as now skewing “very favorably” and keeps a Buy rating and $2,200 price target on FICO shares.