ii view: Experian shares reverse despite $1bn share buyback

Full-year results to 31 March

• Total revenues up 12% to $8.44 billion
• Organic currency adjusted revenues up 8%
• Adjusted earnings per share up 15% to 179.8 US cents
• Second interim dividend of 48 US cents per share
• Total dividend for the year up 11% to 69.25 US cents per share
• Net debt up 11% to $5.18 billion

Guidance:

• Expects full year organic currency adjusted revenue growth of between 6% and 8%
• Expects to deliver another year of double-digit benchmark earnings per share (EPS) growth
• Planning new $1 billion share buyback for year ahead

Chief executive Brian Cassin said:

“FY26 was a record year for Experian, with performance at the upper end of our expectations and strong strategic momentum.

“Looking ahead, we expect another year of strong growth in FY27, supported by continued expansion of our addressable markets, successful strategic progress, further productivity gains, and whilst taking a prudent approach to macroeconomic uncertainties linked to the Middle East.”

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ii round-up:

Credit services company Experian today announced a new $1 billion share buyback programme for the year ahead, although with growth slowing at its core North America business

Full-year sales stripped of acquisitions climbed 8% to $8.44 billion (£6.30 billion), pushing adjusted earnings up 15% year-over-year to 179.8 US cents per share. Sales on the same basis for North America, generating two-thirds of all revenues, grew 9% in the fourth quarter, down from growth of 10% in the prior quarter. Growth was likely affected by reduced consumer loan demand given a spike in rates following the war in the Middle East.

Shares in the FTSE 100 company fell 5% in UK trading having come into these latest results down by close to a fifth so far in 2026. That’s similar to fellow credit checking company Equifax Inc. The FTSE 100 index is up by close to 4% year-to-date.

Often acquiring data for free from consumers and selling it to other businesses, Experian’s data regularly assists credit providers in offering loans prudently.

The Dublin headquartered company predicted adjusted, or organic sales growth for the year ahead of between 6% and 8%, potentially driving another year of double-digit growth in adjusted earnings per share.

Sales at the group’s second-biggest region, Latin America, generating 15% of revenues, rose 18% in the fourth quarter. That’s up from growth of 6% in Q3, aided by enhanced fraud protection services for business customers validating loans.

UK and Ireland sales, accounting for 11% of revenues, rose 3% in Q4, the same as Q3, while those for the rest of the world improved to growth of 5% in Q4 from 3% in Q3.

Broker Morgan Stanley reiterated its ‘overweight’ stance on the shares post the update, rating Experian a ‘top pick.’

ii view:

Experian describes itself as a global data and technology company. It employs around 25,000 people across more than 30 countries. Group services include aiding lending, uncovering and preventing fraud and delivering digital marketing solutions. Just over half of all sales are related to financial services with a further fifth helping other business type customers. The balance of around a quarter of sales assists consumers directly.

For investors, a war in the Middle East causing higher energy prices is putting upward pressure on inflation, casting a shadow over future interest rate policy, with potential consequences for loan demand and credit checking services. The impact of AI on Experian’s business is hard to predict. A previous data breach at Experian underlined the importance of cyber security, while currency moves can impact performance.

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More favourably, relatively low rates of unemployment across many of Experian’s markets should support demand for credit. Product innovation and the group’s own AI initiatives continue to be pursued. Growth is aided by bolt-on acquisitions, while a prospective dividend yield of close to 2% is not to be ignored.  

In all, concerns about elevated inflation, future interest rate policy and the possible impact of AI are reason to be cautious and could affect sentiment. That said, some investors might view the shares as a recovery play given they're trading near multi-year lows compared with a consensus analyst fair value estimate above £40 per share.

Positives:

• Company enjoys both product and geographical diversity
• Growing free consumer memberships

Negatives:

• Uncertain economic outlook
• Subject to currency movements

The average rating of stock market analysts:

Buy