Experian PLC (LSE:EXPN) may be one of the less obvious beneficiaries of the artificial intelligence boom, but Deutsche Bank argues the technology could reinforce rather than disrupt the credit data group's market position.
Shares in the FTSE 100 group have sunk to decade-low levels due to investor concerns about AI disruption, which have ramped up this year.
In a note entitled Ask Jevons, analyst Ben Wild said investors should think of Experian's software as a distribution channel rather than the product itself.
The reference is both to the former Ask Jeeves search engine and to Jevons Paradox, the economic theory that efficiency improvements can increase, rather than reduce, demand for a resource.
It suggests Wild believes AI could have a similar effect on data, analytics and decision-making tools.
Historically, falling costs for information and software have broadened the range of applications for Experian's products. Wild argues that AI will accelerate that trend by making analytics cheaper and easier to deploy, opening up new markets and use cases.
That matters because Experian's value lies less in producing software than in owning and distributing trusted credit and identity data used by banks and other regulated institutions.
According to Deutsche Bank, the company is unusually well placed to capture any increase in demand. It already sits deep within credit decision-making systems, has established distribution networks and benefits from long-standing relationships with financial institutions.
The note suggests AI could expand the value of Experian's existing data assets rather than commoditise them.
However, while Deutsche's 'buy' recommendation was maintained, its target price was cut to 3,500p from 4,000p, still well above the last close of just under 2,620p.
