Tom Mackinnon, an analyst from BMO Capital, maintained the Buy rating on Element Fleet Management. The associated price target is C$40.00.
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Tom Mackinnon’s rating is based on a combination of factors including Element Fleet Management’s strong financial performance and attractive free cash flow yield. The company reported an adjusted operating EPS of US$0.33, which aligns with both Mackinnon’s and the consensus estimates. Despite a slight dip in servicing revenue due to seasonal factors, the operating expenses were better than expected, showcasing improved operating leverage.
Element Fleet Management’s financial outlook remains promising with a 7% free cash flow yield and an anticipated 9% CAGR in free cash flow per share from 2025 to 2027. The company’s strategic initiatives, such as improved client retention and market share gains, are expected to drive revenue growth of at least 6-8%. This growth, coupled with operational leverage and share buybacks, is projected to result in a 10% or higher increase in operating EPS and adjusted free cash flow, supporting Mackinnon’s Buy rating.
Mackinnon covers the Financial sector, focusing on stocks such as Manulife Financial, IGM Financial, and Intact Financial Corporation. According to TipRanks, Mackinnon has an average return of 16.4% and a 72.70% success rate on recommended stocks.
In another report released yesterday, RBC Capital also reiterated a Buy rating on the stock with a C$47.00 price target.