First Apple swallowed a rival. Then the dollar wobbled. Most recently, artificial intelligence spooked the market. The result? Experian PLC (LSE:EXPN) shares have been marked down to their cheapest level in five years, creating what Panmure Liberum reckons is a rare chance to buy a "category killer" at a discount.
The credit data group, which tracks the financial histories of millions of consumers and businesses, has been meeting investors on both sides of the Atlantic over the past fortnight. Top of the agenda: whether its competitive moat remains intact and how AI might help or hinder the business.
On the first question, Panmure is reassuring. Experian operates in what the broker calls "scaled oligopolies", markets dominated by a handful of big players.
Its business model relies on data aggregation through closed-loop reciprocal agreements, a fancy way of saying that lenders share information with Experian, which then sells insights back to them. This creates a virtuous circle that's hard for newcomers to crack.
Take Credit Kudos, a UK challenger credit bureau that Apple acquired in 2022. It appears to have faded from view since, suggesting the barriers to entry remain formidable.
Experian also has a unique advantage: it operates at scale in both business-to-business and direct-to-consumer markets, and holds proprietary data that external AI systems simply cannot access.
Rather than being threatened by AI, Experian is weaving it into its products. Its Ascend platform, for instance, now incorporates artificial intelligence.
The technology is also being deployed internally to boost productivity in areas like coding and customer support. Headcount was flat in the first half despite organic growth, which should support higher margins down the line.
That said, the competitive landscape is shifting. Open banking, which allows consumers to share their financial data with third parties, is intensifying competition in products such as credit decisioning.
Visa and Mastercard have both made acquisitions in this space (Tink and Finicity, respectively), while Experian often partners with fintech providers like Plaid to enhance its offerings.
Still, Panmure expects Experian to deliver organic sales growth of 8%, profit growth of 11.5% and stronger cash flow (thanks to lower capital expenditure) over 2026-28 than it has historically.
The shares, now at 3,340p, trade on 13.5 times enterprise value to forecast earnings before interest, tax, depreciation and amortisation for 2026, close to five-year lows.
The broker has a buy rating and a 4,450p target price.