Hold Rating for WEX Amidst Market Underperformance and Strategic Challenges

William Blair analyst Andrew Jeffrey has maintained their neutral stance on WEX stock, giving a Hold rating on May 27.

Andrew Jeffrey has given his Hold rating due to a combination of factors impacting WEX’s current market position. The company’s shares have underperformed compared to the broader market and its closest peer, Corpay, which has shown better results. The slowing organic revenue growth in non-mobility segments, particularly due to a large transition in the corporate payments segment and the faster-than-expected maturation of the HSA market, has also contributed to this rating.
Furthermore, the potential for a strategic sale or restructuring seems unlikely, given the complexity involved in splitting up WEX’s business. The company’s focus on deleveraging its balance sheet, with leverage at the upper end of its target range, and the shift in capital allocation from mergers and acquisitions to organic growth investments, also play a role in the Hold rating. Despite potential benefits from legislative changes, the overall risk/reward scenario appears balanced, leading to the Hold recommendation.

In another report released on May 27, Bank of America Securities also maintained a Hold rating on the stock with a $161.00 price target.

Based on the recent corporate insider activity of 41 insiders, corporate insider sentiment is neutral on the stock.