Raising Our Fair Value on Experian as We Incorporate a Lower Cost of Equity to Reflect Resiliency

As we tweak our model, we are increasing our fair value estimate on Experian to GBX 2,880 from GBX 2,400. Notably, we are reducing our cost of equity assumption to 7.5% from 9.0%, which we believe is warranted because of the firm’s resilience during COVID-19. During its fiscal 2021 (year ending March 31), Experian reported organic constant-currency revenue growth of 4% and North America organic revenue growth of 7% amid a real U.S. GDP decline of 3.5% during 2020. At current valuations, we regard shares of Experian to be approximately fairly valued. We will be maintaining our wide moat rating and Standard capital allocation rating.