Corpay stock price target raised to $375 by Jefferies

On Wednesday, Jefferies analyst Trevor Williams increased the price target for Corpay (NYSE:CPAY) shares to $375 from $370, while maintaining a Buy rating on the stock. Currently trading at $326.29, the company has analyst targets ranging from $339 to $445. Williams expressed a cautious outlook on the company’s full-year guidance, which anticipates a significant uptick in the second half for the U.S. fleet sector. Despite this, he conveyed a strong level of confidence in the company’s projections. According to InvestingPro data, Corpay maintains a healthy gross profit margin of 78.13% and has demonstrated solid profitability over the last twelve months.

Corpay’s recent strategic moves have caught the attention of analysts, with Williams highlighting several key actions that support the company’s growth trajectory. The investment in AVDX, a partnership with Mastercard (NYSE:MA), and active pursuit of cross-border mergers and acquisitions, coupled with openness to divest larger non-core businesses, are seen as positive steps towards accelerating Corpay’s shift towards its Corporate Payments division. With revenue growth of 5.77% and an overall "GOOD" financial health score from InvestingPro, the company appears well-positioned to execute its strategic initiatives.

Williams noted that the Corporate Payments segment of Corpay stands out as one of the most compelling narratives within its peer group. The analyst believes that these initiatives are crucial for Corpay to achieve a re-rating, which could potentially lead to an increased valuation of the company by the market. Trading at a P/E ratio of 23x and with a market capitalization of $22.99 billion, Corpay’s valuation metrics suggest the stock is currently fairly valued according to InvestingPro’s Fair Value analysis.

The analyst’s statement underscores the importance of Corpay’s focus on its Corporate Payments business: "The recent flurry of activity (AVDX investment, MA partnership, pursuing more cross-border M&A, open to divesting bigger non-core business) are all supportive of an accelerated mix shift to Corp. Pay—which we view as key to a re-rating."

Corpay’s stock price adjustment by Jefferies reflects the firm’s positive stance on the company’s strategic direction and the potential for growth in its valuation. The raised price target is indicative of the confidence that Jefferies has in Corpay’s ability to execute its business plan and capitalize on its Corporate Payments division.

In other recent news, Corpay Inc. reported its Q1 2025 earnings, revealing an 8% increase in revenue year-over-year, reaching $1.6 billion. The company’s earnings per share (EPS) stood at $4.51, aligning with market expectations. Despite the revenue slightly missing the forecasted $1.02 billion, the market response was positive, reflecting confidence in Corpay’s strategic initiatives. The firm announced a strategic partnership with Mastercard, which includes a $300 million investment from Mastercard for a 3% stake in Corpay’s cross-border business. Additionally, Corpay has made a $500 million minority investment in Avid, with the potential for a future full acquisition. Analysts from firms like JPMorgan and William Blair have shown interest in these strategic moves, with expectations of future revenue growth. Corpay maintains its full-year guidance with anticipated organic growth of 10-12%, driven by significant growth in its Corporate Payments segment. The company’s strategic focus includes expanding its Corporate Payments segments and exploring additional acquisition targets.

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