ii view: Experian’s North America sales slow again

First-quarter update to 30 June

• Currency adjusted total revenues up 8%
• Currency adjusted revenues stripped of acquisitions (organic sales) up 7%

Guidance:

• Continues to expect full year organic currency adjusted revenue growth of between 6% and 8%
• Still expects to deliver another year of double-digit benchmark earnings per share (EPS) growth

Chief executive Brian Cassin said:

“We delivered a strong start to FY27. We continue to execute well, supported by our trusted data assets, scaled platforms and growing AI-enabled opportunities."

• Our Services: SIPP Account | Stocks & Shares ISA | See all Investment Accounts

ii round-up:

Credit services company Experian (LSE:EXPN) detailed slowing sales growth but maintained expectations for the full year.

Growth in currency adjusted first-quarter sales stripped of acquisitions of 7% was less than the 9% reported in the prior fourth quarter. Sales on the same basis at its core North America business – generating 67% of group revenues – slowed to 7% from 9% in Q4 and 10% in Q3 last year, hindered by subdued credit card activity.

Shares in the FTSE 100 company gained ground following the results, but have been rangebound since January and are down close to a fifth so far in 2026. That’s similar to rival credit checker Equifax Inc (NYSE:EFX). The FTSE 100 index is up 6%.

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 continued to predict adjusted, or organic sales for the full year of 6-8%, potentially driving another year of double-digit growth in adjusted earnings per share.

Sales at Experian’s second-biggest region, Latin America (15% of revenues), rose 12% during this latest quarter, down from growth of 16% in Q4. Total revenues up 25% is attributed to the completed acquisition of digital identity company idwall in Brazil.

UK and Ireland sales, accounting for 11% of revenues, rose 5% in Q1, improving from 4% in Q4. Recent new business wins and the launch of its new 1250 consumer credit score service both fed in.

Broker Morgan Stanley reiterated its ‘overweight’ stance on the shares post the update, flagging Experian as 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, renewed tensions in the Middle East and resulting high energy prices casts 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 remains hard to predict. A previous data breach at the company underlines the importance of cyber security, while currency moves can impact performance.

• Leading banks upgraded ahead of results season
• Stockwatch: a major inflection point for these two shares?
• Why Ocado shares just crashed to 13-year low

To the upside, relatively low rates of unemployment across many of Experian’s markets should help support demand for credit and credit checking services. Growth is being bolstered by bolt-on acquisitions. Product innovation and the group’s own AI initiatives continue to be pushed, while a forecast dividend yield of around 2% is not to be forgotten.  

On balance, concerns about elevated inflation and potentially higher interest rates offer caution. That said, the increasing value of data and a consensus analyst fair value estimate above £35 per share will likely keep investors interested.

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