With Equifax Down 30%, Is The Stock Finally Fairly Priced?

Analysts at Argus Research turned bearish on Equifax Inc. (NYSE: EFX) as the company's data breach could prove to be the "most serious" data-hack in history. Analyst Jasper Hellweg downgraded Equifax's stock from Buy to Hold with no assigned price target.

Equifax's management hasn't handled the data breach very well, especially after its decision to offer its TrustedID Premier Service resulted in even more complaints as the terms of service initially disqualified customers from taking part in any class action lawsuits. Meanwhile, Hellweg noted several high-ranking executives sold large positions of their stock "far in advance" of the public acknowledgment of a data breach.

While the argument can be made that the executives in question weren't aware of the data breach at the time of their stock sale, it could still "somewhat impact the public's perception" of the company.

'Fairly Valued'

The 30-percent decline in Equifax's stock has now created a scenario where the stock is "fairly valued" close to $98 per share, Hellweg said, but the stock should also be viewed as "out of investor favor" for the time being.

Equifax's stock has benefited from a long-term bullish pattern of setting higher highs and higher lows dating back to 2011. This pattern broke after the stock fell "sharply" in reaction to the data breach.

"While we still believe the company has value based on its strong history, we would want to see better comments from management or stabilization in the credit reporting environment prior to moving the company back onto our BUY list," Hellweg concluded.

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