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On Friday, Keefe, Bruyette & Woods adjusted their financial outlook for WEX Inc. (NYSE:WEX), reducing the price target from $220.00 to $200.00. Despite this change, the firm has kept its Outperform rating for the company’s shares.
The adjustment follows the release of WEX’s fourth-quarter results for 2024, which prompted the firm to revise their earnings per share (EPS) estimates for 2025 and 2026. The new EPS forecasts stand at $15.00 and $16.50, reduced from the previous $16.70 and $19.25, respectively. WEX maintains strong fundamentals with a 72.17% gross profit margin and generated $2.63 billion in revenue over the last twelve months.
The lowered price target is based on a 12-times multiple of the new 2026 EPS estimate. The decision to maintain the Outperform rating comes amid recognition that WEX’s downgraded long-term growth targets were not entirely unexpected, as the company has struggled to meet these goals in recent years.
Keefe, Bruyette & Woods notes that WEX management plans to accelerate investment throughout 2025, a strategy expected to enhance revenue growth in the latter half of the year and lay a foundation for improved performance in 2026. With WEX stock currently trading at approximately 9 times the firm’s estimated 2026 EPS, analysts believe the recent market selloff may be exaggerated.
They also suggest that if management successfully achieves the new long-term EPS growth target of 10-15%, the current share price could represent an attractive entry point for investors. Keefe, Bruyette & Woods’ stance reflects confidence in WEX’s potential for revenue growth and long-term earnings despite the near-term adjustments.
In other recent news, WEX Inc. has experienced a series of financial developments. Analysts from William Blair downgraded the company’s stock rating from Outperform to Market Perform, citing concerns about the company’s competitive edge and capital allocation strategies. In addition, the company is planning to invest approximately $25 million in 2025 to stimulate faster growth, a move that has been met with skepticism from William Blair due to doubts about potential returns.
On the earnings front, WEX’s fourth-quarter results were in line with analysts’ predictions for both revenue and adjusted earnings per share (EPS), as reported by Raymond (NSE:RYMD) James. However, the company’s forecast for 2025 led analysts to anticipate a considerable drop in future estimates. In particular, the revenue guidance was approximately 3% lower than the consensus of Wall Street analysts, and the adjusted EPS projection was 11% below the midpoint of expectations.
Furthermore, BofA Securities downgraded WEX’s stock from Buy to Neutral and significantly reduced the price target to $164. This adjustment was prompted by WEX’s fourth-quarter earnings report, which BofA Securities believes has eroded confidence in the company’s performance. The company’s lowered earnings guidance for the upcoming year fell short of expectations, and its long-term growth targets were also revised downwards. These recent developments highlight the unique growth challenges and increased competitive pressures that WEX is currently facing.
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