A potential spark to life of the US mortgage market is behind the upgrade of credit rating agency Experian (LON:EXPN) to ‘add’ from ‘reduce’ by Seymour Pierce.
The City broker cites a front-page Financial Times article on Bank of America’s plans to expand the number of home loans it offers as offering support for this thesis.
Mortgage-related revenues accounted for around 10% of the US credit bureau’s revenue last year, which in turn represented around 20% of Experian’s total sales in 2012, Seymour Pierce said.
“The shares have underperformed the wider market by six per cent in the past month and are now trading at what we view as more attractive levels,” added Caroline de La Soujeole.
This morning she raised her valuation of the stock by £1 to £11. Experian is currently changing hands for £10.20, valuing the group at £10.3bn.
Experian is hosting an investor day on January 29.