Needham analyst Kyle Peterson maintains Equifax Inc (NYSE:EFX) with a Buy and raises the price target from $230 to $305.

The analyst highlights EFX as his Top Pick 2024 and adds it to the Needham Conviction List, replacing HireRight Holdings Corp (NYSE:HRT).

While EFX's fundamentals have faced pressure since mid-FY22 due to a spike in mortgage rates, the analyst expects the recent decline in interest rates to serve as a sizable tailwind heading into 2024.

In addition, EFX's non-mortgage businesses have been performing well. They are scaling through new products, pricing increases, and record growth, all of which Peterson expects to benefit the company in the coming year.

Peterson notes that EFX has made significant progress in strengthening its non-mortgage businesses and streamlining the cost structure to generate solid growth even in a rising rate environment. With a more substantial core business and an improving mortgage backdrop, the analyst expects the shares to outperform his coverage in 2024 significantly.

EFX has an attractive data platform comprising a vast array of credit, financial, bill payment, employment/income, and demographic data that EFX can bundle and sell to corporations, government agencies, and individuals to provide insights. In particular, the analyst notes that the company's workforce solutions segment helps differentiate EFX from its two closest competitors (Experian Plc (OTC: EXPGY) and TransUnion (NYSE:TRU)).

Peterson notes that the company's differentiated data and accelerating organic growth create a favorable investment opportunity for investors looking for exposure to financial data.

With the shares trading at a P/E multiple of 25x his FY25 estimate, the analyst views the risk-reward as favorable and notes the bias to FY24 numbers is to the upside as mortgage headwinds ease.

Peterson projects Q4 revenue and EPS of $1.31 billion and $1.76.

Price Action: EFX shares traded higher by 1.07% at $235.53 on the last check Thursday.

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