Morgan Stanley raised its rating to "outperform" on valuation grounds.
Recent dollar weakness has left Experian underperforming US credit checking agency peer Equifax by 15 per cent in the past few weeks, undervaluing its superior growth and scope to expand by acquisision, Morgan Stanley said.
Morgan Stanley also raised its target price to 676p from 632p noting a forecast 9% increase in organic sales growth for 2008-09.
It also said good geographic and product diversity, a 14-19% growth in annual earnings per share and a forecast 2007 free cash flow yield of 5.4% bode well for the stock.
As one of the large dollar earners on the FTSE-100, Experian could also be more attractive now that the US currency has taken a hit in recent weeks.
Morgan Stanley raised its recommendation for the company's shares to ``overweight'' from ``equal-weight'' with a 12-month price estimate of 676 pence a share.
The brokerage forecast 9 percent sales growth from existing businesses between 2008 and 2009, and annual earnings gains of 14 percent to 19 percent.
The company is ``growing faster than its peers,'' analysts wrote in a note to investors yesterday. It ``forms a compelling investment case.''
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