Experian (LSE:EXPN) is set to release its first-quarter results on Thursday, which will be its first full quarter encompassing the consumer inflation crisis in the consumer credit reporting group's key markets.
The FTSE 100 company is resilient but "not immune to a recession", according to Barclays.
For the current year, the FTSE 100 group has guided to 7-9% organic revenue growth, with Barclays analysts saying: "whilst no two downturns are the same, we shouldn’t forget EXPN navigated both a credit induced recession and Covid-19 without a dip in organic revenues".
The analysts said their downside scenario would see Experian experiencing low- to mid-single-digit revenue growth with "flattish" margins.
The shares, which hit an all-time high of almost £37 in December, fell below £23 last month before a bit of a rally to sit at a 28% deficit for the year-to-date.
But market conditions could prove favourable for the credit industry middleman, given that credit card debt is 11% up in the UK as inflation continues to squeeze consumer finances, said analyst Laura Hoy at Hargreaves Lansdown.
“Experian’s been riding high on a post-pandemic borrowing boom and first-quarter results should show more of the same,” said Hoy.
At Shore Capital, analyst Robin Speakman predicted the growth of around 8% for the first quarter, a big slowdown from the 22% underlying headline rate seen a year ago and more in line with the rate to the fourth quarter of last year.
"The expected performance reflects mix as consumer spending segments slow, with contra-cyclical, risk analysis and spend management activities rising. These trends are likely to continue in the current Q2 period in our view, growth slowing a little before stabilising in Q3/Q4. Experian's service mix has proved resilient in past cycles, and we expect it to remain so."
But Speakman estimates a healthy 5% free cash flow yield which could increase shareholder distribution potential.