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On Thursday, Keefe, Bruyette & Woods adjusted their financial outlook for Corpay (NYSE: CPAY), raising the price target to $445 from the previous $415 while reaffirming an Outperform rating. The revision follows Corpay’s fourth-quarter 2024 earnings release, which led to a modification of the firm’s earnings per share (EPS) estimates for the years 2025 and 2026. Analysts at Keefe, Bruyette & Woods now anticipate EPS of $21.07 and $24.21 for 2025 and 2026, respectively, a decrease from their prior estimates of $21.50 and $25.66.
The new price target is based on an 18 times price-to-earnings (P/E) multiple applied to the revised 2026 EPS estimate. Currently, Corpay trades at a P/E ratio of 27.07x, which InvestingPro data indicates is high relative to near-term earnings growth. Despite noting a potential for modest organic growth weakness in the company’s consolidated outlook for 2025, the concerns primarily stem from the ’other’ segment of the business, which is smaller and not considered core to Corpay’s operations.
Keefe, Bruyette & Woods highlighted management’s positive stance on the company’s future, particularly regarding the potential for growth through mergers and acquisitions (M&A) and capital management strategies. The company has initiated several measures aimed at improving the performance of both its corporate payments division and other lagging segments. While acknowledging that expectations were high leading up to the earnings report, which might result in a dip in the stock price, the firm believes that the overall results were robust and the company’s prospects remain favorable.
In other recent news, Corpay, Inc. reported its fourth-quarter earnings, surpassing expectations with adjusted earnings per share (EPS) of $5.36, outperforming the analyst consensus of $5.32. However, the company’s revenue of $1.03 billion fell short of the anticipated $1.06 billion. Looking ahead, Corpay provided a weaker-than-expected forecast for 2025, with an adjusted EPS range of $20.75 to $21.25 and revenue between $4.35 billion to $4.45 billion, both falling below analyst expectations.
In terms of segments, Corpay’s Corporate Payments sector demonstrated strong performance, with revenue increasing 38% YoY to $346.2 million. Conversely, the Vehicle Payments segment experienced a slight decrease in revenue to $497.7 million. Despite these mixed results, Corpay anticipates sales growth of approximately 20% in 2025, with revenue and adjusted EPS growth of 10% to 12%.
However, the company noted that its earnings outlook could be negatively impacted by worsening foreign exchange rates, fuel prices, and interest rates compared to its November forecast. These recent developments underscore the dynamic nature of Corpay’s financial landscape.
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