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RBC Capital initiated coverage on Element Fleet Management (TSX:EFN) (OTC:ELEEF) with an outperform rating and a price target of C$43.00. The firm cited the company’s position in an industry with high barriers to entry and elevated switching costs.
The research firm highlighted Element’s advantages in a sector characterized by rational pricing driven by a favorable competitive landscape, long-term contracts, and low client turnover. RBC Capital also noted the attractive total addressable market with opportunities to gain market share from self-managed fleets.
Element Fleet Management leverages its scale to help clients reduce their Total (EPA:TTEF) Cost of Fleet Operations by a targeted 10%-20%, according to RBC Capital. This creates what the firm describes as a "powerful flywheel" that strengthens client partnerships and provides counter-cyclical benefits during periods of economic uncertainty.
Client satisfaction metrics support this assessment, with Net Promoter Score (NPS) more than doubling since 2020. The company has also seen growth in Global Services per Vehicle under Management, increasing from 3.2 in 2021 to 3.7 in 2025.
RBC Capital analyst Bart Dziarski believes Element benefits disproportionately from the positive industry characteristics due to its market-leading position. The firm’s C$43.00 price target reflects confidence in the company’s business model and growth prospects.
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