TransUnion (NYSE: TRU) has traded in a very narrow range since its initial public offering (IPO). The consumer credit reporting agency came public in June, selling 29.5 million shares at $22.50, with a price range ahead of the IPO of $21 to $23 per share.
Source: Thinkstock
Since the IPO, TransUnion shares have traded only in a range of $23.42 to $25.89. The company now has a $4.6 billion market cap, with shares last seen trading at $25.17, after the quiet period.
24/7 Wall St. has compiled some basic analyst data. While most of the ratings seen were Buy and Outperform, the real issue here is that the overall price targets just do not seem to be very aggressive, not in a manner that would entice many new post-IPO buyers.
The following are the analyst ratings we have seen, with price target data if available:
- Bank of America Merrill Lynch started it as Neutral with a $27 price objective.
- Deutsche Bank started it as Buy with a $29 price target.
- Evercore ISI started it as Buy with a $30 target.
- Goldman Sachs started it as Neutral with a $26 target.
- JPMorgan started it as Overweight with a $28 target.
- RBC Capital Markets started it as Outperform with a $28 target.
- Stifel Nicolaus started it as Buy with a $29 target.
- Wells Fargo started it as Market Perform with a $24 to $27 valuation range.
As far as one of the cautious ratings, Wells Fargo’s William Warmington Jr. said:
We view TransUnion as an attractive franchise with a highly defensible triopoly industry structure and strong financial characteristics. We believe that TransUnion has closed the gap with competing credit bureaus Equifax and Experian from an operational, geographic, and product offering standpoint. The valuation gap has closed too with the enterprise value/EBITDA valuation difference between Equifax and TransUnion at about 7% for expected 2015 and 9% for expected 2016. With Equifax near its all-time peak valuation on both an absolute and relative basis (vs. the S&P 500), however, we view TransUnion’s risk/reward as balanced and await a more-attractive entry point. Our $24 to $27 valuation range equates to 10.5-11.5x our 2017E EBITDA.
That $25.17 share price was after a drop of 0.4% early Tuesday afternoon.
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