On Wednesday, Morgan Stanley (NYSE:MS) reiterated its Overweight rating on Experian Plc (LON:EXPN:LN) (OTC: EXPGY (OTC:EXPGY)), with a steady price target of GBP41.50. The firm's analysis highlighted Experian (OTC:EXPGF)'s first half of the fiscal year 2025 trading performance, noting that the company's organic growth of 7% matched the consensus estimate and fell within the full-year guidance of 6-8%. Excluding the impact of a data breach, the organic growth rate was slightly higher at 8%.
Revenue growth from ongoing activities rose to 7% at constant exchange rates and 6% at actual rates. Regionally, North America and Latin America both reported a 7% increase in organic revenue growth for the first half, with North America showing a slight decrease from the first to the second quarter and Latin America displaying an uptick. The UK and Ireland maintained a steady 2% growth rate for both quarters, while EMEA and Asia Pacific ended the half-year with 7% growth, improving in the second quarter.
The breakdown by division showed that B2B experienced a sequential improvement, with 6% growth in the first half, indicating a stronger second quarter compared to the first. Consumer Services growth was at 9% for the half, although it slowed down in the second quarter. This deceleration was attributed to the timing of revenue from a one-off data breach; when excluding this factor, growth was robust in both quarters, driven by stronger membership and broad-based growth.
Operating profit for the period reached $1,011 million, an increase of over 8% year-over-year, aligning with Morgan Stanley's expectations and slightly surpassing the consensus. The resulting EBIT margin stood at 28.%, marking an improvement of 60 basis points year-over-year at constant currency. Earnings per share (EPS) grew by 8% compared to the previous year.
InvestingPro Insights
Experian's strong performance, as highlighted in Morgan Stanley's analysis, is further supported by real-time data from InvestingPro. The company's revenue for the last twelve months as of Q4 2024 stood at $7,097 million, with a notable revenue growth of 7.22% over the same period. This aligns well with the 7% organic growth mentioned in the article and falls within the company's full-year guidance of 6-8%.
InvestingPro Tips reveal that Experian has maintained dividend payments for 45 consecutive years, demonstrating a commitment to shareholder returns. This is particularly relevant given the company's reported 8% growth in earnings per share. Additionally, Experian is trading at a low P/E ratio relative to its near-term earnings growth, with a PEG ratio of 0.69, suggesting potential undervaluation despite its strong performance.
For investors seeking a more comprehensive analysis, InvestingPro offers 12 additional tips for Experian, providing a deeper understanding of the company's financial health and market position.
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