On Tuesday, Oppenheimer raised its price target on TransUnion (NYSE:TRU) shares to $118 from $97, while keeping an Outperform rating on the stock. The firm's adjustment follows a forecasted increase in the company's third-quarter earnings per share (EPS) from $1.00 to $1.03, citing higher than anticipated revenue.
The anticipated revenue increase for TransUnion is attributed to stronger performance in the mortgage, insurance, and international sectors. Oppenheimer's analysts expect these areas to contribute significantly to the company's financial results.
In addition to the third-quarter adjustments, Oppenheimer has made modest upward revisions to its full-year earnings projections for TransUnion. The firm's estimates for the company's EPS in 2024 and 2025 have been slightly increased from $3.86 to $3.90 and from $4.42 to $4.43, respectively. Furthermore, the firm has introduced an initial EPS estimate of $5.14 for 2026.
The new stock price target of $118 is based on a 23x multiple, which Oppenheimer believes is justified by the company's growth prospects. Despite TransUnion's growth profile, the stock is currently trading at a discount when compared to its long-term average and its peer Equifax (NYSE:EFX).
This revised price target suggests confidence in TransUnion's ability to outperform market expectations and indicates potential upside for investors based on the company's current trading price.
InvestingPro Insights
TransUnion's recent performance and future prospects align with several key metrics and insights from InvestingPro. The company's revenue growth of 7.52% in the most recent quarter supports Oppenheimer's optimistic outlook on stronger performance in various sectors. This growth is complemented by TransUnion's impressive gross profit margin of 60.79% over the last twelve months, indicating efficient cost management.
InvestingPro Tips highlight that TransUnion has raised its dividend for 3 consecutive years, showcasing a commitment to shareholder returns. Moreover, net income is expected to grow this year, aligning with Oppenheimer's upward revisions in earnings projections. These positive indicators are further reinforced by 4 analysts revising their earnings upwards for the upcoming period.
The stock's strong performance is evident in its 51.06% price total return over the past year and its current trading near its 52-week high (98.19% of the high). This momentum supports Oppenheimer's bullish stance and increased price target.
Investors should note that TransUnion is trading at high valuation multiples, including EBIT, EBITDA, and revenue. While this could indicate market confidence, it also suggests the stock may be priced for perfection.
For a more comprehensive analysis, InvestingPro offers 13 additional tips for TransUnion, providing deeper insights into the company's financial health and market position.
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