After Experian PLC (LSE:EXPN) shares sank 30% over the past year, Stifel joined the throng of City voices suggesting that investors are overly pessimistic about the credit data group’s prospects in the age of artificial intelligence.
The US brokerage said the 22% sell-off since the start of the year has created “an attractive entry point into a consistent compounder with a strong track record”.
Stifel cut its target price to 3,900p from 4,400p after “prudently” increasing its weighted average cost of capital assumption by 25 basis points to reflect “greater company-specific risk from AI tools potentially adversely impacting Experian’s long-term prospects”.
But a 'buy' recommendation was reiterated, arguing that the shares were trading at a "30%+ discount" to the ten-year average valuation multiple.
While concerns that AI tools could disrupt data and analytics businesses have weighed heavily on sentiment across the sector, the analysts noted that more than 90% of Experian’s revenue came from proprietary data, limiting the risk of disintermediation.
The note highlighted Experian’s “record year” in the 2026 financial year, with revenue growth of 13% and benchmark earnings up 15%. North America remained the standout region, while management guidance for 2027 was viewed as “somewhat prudent”.
Stifel also pointed to strong cash generation, ongoing buybacks and AI-driven productivity gains, including 10-15% coder productivity uplift from AI coding tools.
"Whilst mindful of AI disruption concerns, we view the 23% year-to-date share price fall as overdone."
The upbeat assessment follows similar views espoused by Deutsche Bank, RBC Capital Markets and UBS last week that Experian’s scale, proprietary data assets and expanding AI capabilities leave it well positioned to sustain double-digit earnings growth despite broader concerns over AI disruption and a softer lending backdrop.