11:34 AM EDT, 06/20/2024 (MT Newswires) -- TransUnion ( TRU ) is likely to exceed earnings per share expectations on "cautious" guidance for its emerging verticals, BofA Securities said in a note Thursday.

Analysts, including Heather Balsky, said they expect strength in emerging verticals to increase EPS, with insurance leading the way. Larger property and casualty insurers are increasing their marketing spending, which is a positive for TransUnion ( TRU ). In Q1, organic sales in emerging verticals grew by 4%, surpassing the company's outlook of low-single digits, according to the note.

TransUnion ( TRU ) did not adjust its guidance despite this increase. The company is expected to raise its 2024 organic sales growth forecast, excluding mortgage, from its current outlook of 2% to 3.5%, the analysts said. BofA's estimate is 4%.

TransUnion ( TRU ) is also expected to see improved profit margins due to cost reductions amounting to $65 million in 2024, further boosting investor sentiment, the investment firm said.

These savings primarily resulted from shifting workforce operations to lower-cost countries, a move anticipated to increase margins by about 100 basis points from Q1 to Q2, the analysts said, adding that they predict a margin improvement exceeding guidance by 20 basis points due to increased sales.

"Inexpensive valuation, persistent stability in consumer lending, and room for upside in Emerging Verticals fuel our more positive outlook. We also think [TransUnion ( TRU )] has greater exigency to meet or beat after a volatile 2023," the analysts said.

BofA Securities upgraded TransUnion ( TRU ) to buy from neutral with a price target of $92.

TransUnion ( TRU ) shares were about 4% higher in recent trading.

Price: 74.15, Change: +2.84, Percent Change: +3.98