The suggestion that FTSE 100 stocks are too large or mature to generate meaningful capital appreciation lacks substance. I believe that even large-cap shares can still deliver strong returns if an investor knows where to look. Here’s one that analysts have very positive expectations for!

Notable supporters

I’m referring to Experian (LSE:EXPN). The global data and analytics powerhouse has seen its share price fall by 32% over the past year.

At the moment, the average target price for the coming year from the 24 contributing analysts is 3,904p. So from the current share price of 2,734p, that’s a potential gain of 43%. Notable inclusions include Barclays, with the research team forecasting 4,500p, and Goldman Sachs at 4,060p.

Of course, these are just subjective views. Even though the analysts are experts in their field, there’s no guarantee that the stock will hit these levels over the next year. But the main takeaway for me is that the broad consensus is that the stock has momentum to head higher, even if the exact price to target is up for discussion.

One eye on the past

Even with the strong outlook, some investors might be concerned with the size of the share price fall in the last year. One reason for this is concern around the broader lending environment. Higher interest rates have slowed mortgage activity and reduced borrowing volumes across parts of the US economy. Experian generates around two-thirds of overall revenue from the US, so that’s a key area. Since Experian earns money from credit checks and lending activity, any slowdown in consumer borrowing can weigh on sentiment.

Another point has been the ongoing battle around credit scoring. The industry is facing disruption from regulatory scrutiny and increased competition from other credit scoring providers. This is a risk going forward, as pricing pressure could hurt profitability in parts of the mortgage ecosystem.

Balancing everything out

Despite the risks, the underlying business continues to perform well. In the latest full-year results, Experian delivered 8% revenue growth, while profits also increased.

More importantly, I like the fact that Experian is becoming less dependent on traditional credit reporting. It has been working on ancillary tools, such as fraud prevention and AI-driven analytics. These are fast-growing markets, which could easily add more significant revenue streams further down the line.

With a price-to-earnings ratio of 23.91, it’s well above the FTSE 100 index average, and therefore not a cheap stock. But if it can shrug off some of the competition and enjoy stronger consumer activity in the US, I believe it could make back a lot of the share price losses from the last year.

So even though I think a 43% rally in the coming year could be a little optimistic, I do feel it’s a stock worth considering for investors.

Jon Smith has no positions in the shares mentioned.