Barclays Upgrades TransUnion, Hits Pause On Fair Isaac

"Signalling our belief that the credit bureaus will continue to outperform the market and benefit from a 'scarcity value' in Industrials, we upgrade TRU to OW. We have been constructive with our commentary lately, and with 12 percent upside to our $37 price target," the analyst said in a research note to clients.

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The brokerage thinks the recent pause should be taken as buying opportunity in TransUnion shares after a strong demonstration by its management during the financials conference last week.

As far as Fair Isaac is concerned, Patnaik thinks that the stock has delivered 78 percent return since 2015 compared to S&P 500 gain of 4 percent. Therefore, he prefers to step to the sidelines on the stock, elaborating that the stock has already priced D2C scores.

The brokerage expects the next upside to come from Decision Management Suite. However, Barclays wants more evidence of tangible progress to be more constructive on it. "Additionally, given our discussions with the CEO at the Financials Conference last week, significant investments to support growth will continue, which could mean that 2017 might not be the "inflection point" that some investors are hoping for (at least at 25x CY18 P/E)," the analyst concluded.

At time of writing, Fair Issac was down 1.64 percent at $126.76; TransUnion was up 1.03 percent at $33.44.

Full ratings data available on Benzinga Pro.