Equifax (EFX) is facing headwinds from persistent mortgage market weakness amid elevated interest rates, concerns about a potential softening in consumer lending, and regulatory headline risk around a potential move from a tri-merge standard to a bi-merge standard, RBC Capital Markets said in a Sunday note.
The company expects mortgage originations to decline by a high-single-digit percentage for full-year 2027 if current mortgage rates persist, with most of the weakness occurring in the first eight months, RBC analysts said.
They model a mortgage inquiry decline of a mid-teens percentage in the first half of 2027.
Equifax also highlighted early signs of softness in its Auto, Financial Institutions, and Talent verticals toward the end of Q3 and into early Q4.
The analysts said they are closely observing developing headwinds in the U.S. Information Solutions segment, the Verifier Talent business, and the Consumer Lending segment.
Further, the company estimated the potential revenue impact of the tri-merge to bi-merge transition at roughly $80 million per year, the analysts said.
Equifax views the risk as manageable, with multiple differentiated assets as competitive advantages, but the analysts said the broader regulatory backdrop remains an overhang for the company.
RBC downgraded the company's stock rating to Sector Perform from Outperform and raised the price target to $189 from $177.
Price: 178.53, Change: -3.84, Percent Change: -2.10
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