FICO selloff overstates regulation risk, says Redburn Atlantic

Redburn Atlantic raised the firm’s price target on FICO (FICO) to $2,097 from $2,045 and keeps a Neutral rating on the shares. The firm says recent Federal Housing Finance Agency comments have revived fears of regulation for FICO’s U.S. credit scores business, leading initially to a 30% decline in the shares in just over a week. Risks to FICO’s monopoly “are non-zero in the long run, with negative implications for its longer term valuation,” the analyst tells investors in a research note. However, Redburn believes the recent share correction overstates the likelihood that regulation can have any real impact on FICO’s pricing in the near term. It sees a near-term opportunity in the shares despite maintaining a Neutral rating.