Equifax Inc. (NYSE: EFX) shares plunged
more than 13 percent Friday on news of a massive security breach. The breach reportedly impacted as many as 143 million
Americans.
Deutsche Bank analyst Kevin McVeigh issued a new Equifax note on
Thursday discussing just how costly much smaller
prior breaches have been at other companies. Here’s a breakdown of some of the numbers:
-
TJX Companies Inc (NYSE: TJX) (2007) — 77
million records impacted, $2.22 cost per breach.
- Heartland Payment Systems (2009) — 130 million records impacted, $1.08 cost per breach.
-
Sony Corp (ADR) (NYSE: SNE) (2011) — 94
million records impacted, $1.26 cost per breach.
-
Global Payments Inc (NYSE: GPN) (2012) — 2
million records impacted, $62.67 cost per breach.
-
Target Corporation (NYSE: TGT) (2013)—40
million records impacted, $5.05 cost per breach.
“While this is a fluid situation + EXTREMELY difficult to quantify, we have put our best effort + suggest the financial impact
could be in the range of $300-$400m [~5% market cap] given costs for credit monitoring, regulatory fine + penalties,” McVeigh wrote
(see his track record here).
Related Link: The Equifax Hack: What We
Know
Perhaps the only silver lining for Equifax investors is that larger breaches tend to have a smaller cost per breach, he
said.
As it stands, the Equifax breach is one of the five largest cybersecurity breaches in history, according to CSO. Here’s a
look at the top five:
- Heartland Payment Systems (2009) — 134 million customers impacted.
- Equifax (2017) — 143 million customers impacted.
-
eBay Inc (NASDAQ: EBAY) (2014) — 145
million customers impacted.
- Adult Friend Finder (2016) — 412.2 million users impacted.
- Yahoo (2013) — 1.5 billion customers impacted.
For investors wondering whether or not the Equifax sell-off is a trading opportunity, TD Ameritrade chief strategist JJ Kinahan told
Benzinga traders are better off not trying to pick a potential
bottom in the stock.
"In these situations, the initial reaction is usually going to be a very harsh one," Kinahan said. "The conundrum is you're
never sure if it's going to be a small event and they can recover (i.e., Target) or if it's going to be very prolonged. This is
truly their business, so this is one that may last a bit. What I would truly tell people is if you don't have a position, you don't
have to be a person that has to pick the bottom. I would let it sort itself out over the next few weeks and then get back in."
At last check, shares of Equifax were down 13.46 percent at $123.51.
Related Link: After
Security Breach, Is The Long-Term Thesis Still Intact For Equifax?
Latest Ratings for EFX
Date |
Firm |
Action |
From |
To |
Sep 2017 |
Morgan Stanley |
Maintains |
|
Equal-Weight |
Jun 2017 |
Argus |
Initiates Coverage On |
|
Buy |
Apr 2017 |
Stephens & Co. |
Downgrades |
Overweight |
Equal-Weight |
View More Analyst Ratings for
EFX
View the Latest Analyst Ratings
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