Increasing Our TransUnion Uncertainty Rating to High

Ahead of the firm’s release of first-quarter financial results, we are increasing our fair value estimate on wide-moat-rated TransUnion to $101 from $99 per share. We are increasing our long-term revenue expectations for the firm’s international segment as we believe increased credit utilization and economic growth in emerging markets support a brighter outlook. These changes are partially offset by raising our cost of equity assumption to 8.0% from 7.5% to account for a higher cost of equity in emerging markets. Though we believe TransUnion has only modest sensitivity to the economic cycle, we are increasing the Morningstar Uncertainty Rating to High from Medium as the firm’s net leverage ratio, which was 3.8 times at the end of 2022, is elevated.