Why Equifax Inc. (EFX) Shares Tumbled 15% Today

Equifax hack could impact 143 million consumers; Executives may have illegally sold shares using inside information.

Equifax Inc. (NYSE:EFX) stock tumbled 15% Friday morning as Wall Street came down hard on the company. The reason? The credit monitoring firm announced that hackers stole records containing personal information on 143 million of its customers in the US. In addition, Bloomberg revealed that three of the company’s senior executives, including the company’s chief financial office, sold nearly $1.8 million in shares after the company learned of a massive hack.

Equifax CEO Richard F. Smith commented, “This is clearly a disappointing event for our company, and one that strikes at the heart of who we are and what we do. I apologize to consumers and our business customers for the concern and frustration this causes […] We pride ourselves on being a leader in managing and protecting data, and we are conducting a thorough review of our overall security operations. We also are focused on consumer protection and have developed a comprehensive portfolio of services to support all U.S. consumers, regardless of whether they were impacted by this incident.”

Smith continued, “I’ve told our entire team that our goal can’t be simply to fix the problem and move on.  Confronting cybersecurity risks is a daily fight. While we’ve made significant investments in data security, we recognize we must do more. And we will.”

On the ratings front, Equifax has been the subject of a number of recent research reports. In a report released today, Evercore ISI analyst David Togut reiterated a Buy rating on EFX, with a price target of $174, which represents a potential upside of 43% from where the stock is currently trading. Separately, J.P. Morgan’s Andrew Steinerman assigned a Buy rating to the stock.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, David Togut and Andrew Steinerman have a yearly average return of 14.8% and 15.1% respectively. Togut has a success rate of 79% and is ranked #808 out of 4633 analysts, while Steinerman has a success rate of 81% and is ranked #501.

Sentiment on the street is mostly bullish on EFX stock. Out of 7 analysts who cover the stock, 7 suggest a Buy rating . The 12-month average price target assigned to the stock is $155.50, which represents a potential upside of 28% from where the stock is currently trading.

Equifax engages in the provision of information solutions and human resources business process outsourcing services. It operates through the following business segments: U.S. Information Solutions, International, Workforce Solutions, and Personal Solutions. The U.S. Information Solutions segment includes consumer and commercial information services, mortgage loan origination information, financial marketing services, and identity management. The International segment offers information, technology, and services to support debt collections and recovery management in Europe and Latin America. The Workforce Solutions segment covers employment, income, and social security number verification services as well as complementary payroll-based transaction and employment tax management services. The Personal Solutions segment sells credit information, credit monitoring, and identity theft protection products.


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