What Argus Has to Say About the Equifax Hack
Equifax saw its shares continue to fall early on Friday, over a week after it came to light that the firm had been hacked.
Equifax Inc. (NYSE: EFX) saw its shares continue to fall early on Friday, over a week after it came to light that the firm had been hacked. The stock has dropped about 35% since then, and there doesn’t seem to be an end in sight. Analysts and investors alike appear to be abandoning the ship.
Argus took this opportunity to lower the stock’s rating to Hold. At the same time, the independent research firm also adjusted its 2017 EPS forecast to $5.96 from $6.10, reflecting current weakness in the GCS segment and the fallout from the recent data breach. The EPS estimate implies 8.0% growth from the $5.52 recorded in 2016. However in 2018, the firm is looking for EPS to increase by 6.4%, to $6.34.
The research firm made this downgrade following news about a major hack on Equifax’s data, and this could have lasting effects. The shares have fallen significantly since the September 7 disclosure of the breach, and problems have continued to grow ever since.
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Argus said in its report:
We believe the company has not handled the aftermath of the breach well. Equifax offered the use of its TrustedID Premier Service to help determine if a person has been affected by the hack; however the offer led to additional complaints as terms of the service initially disqualified users from participating in any class-action lawsuit. Equifax also did not initially offer free credit freezes, aimed at keeping new creditors from accessing consumer files through Equifax’s platform.
One of the main controversial issues surrounding this hack was that days after the breach was initially discovered, but far in advance of the public announcement, several executives sold large positions of their corporate stock. CFO John Gamble sold shares worth just under $1,000,000, president of U.S. Information Services Joseph Loughran sold just under $600,000 of company stock, and the president of the business unit Workforce Solutions Rodolfo Ploder sold roughly $250,000 worth.
While these executives still hold tens of thousands of the shares, and while the company stated that the individuals were not aware of the breach at the time of sale, they may fall under scrutiny or somewhat impact the public’s perception of Equifax.
The company is facing myriad class action lawsuits pursuant to this hack, which could be incredibly burdensome in the future.
Shares of Equifax were last seen down over 3% at $93.50, with a consensus analyst price target of $81.38 and a 52-week range of $49.28 to $83.04.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
