CIBC’s Paul Holden raised his Element Fleet Management Corp. target to $25 from $24 with an “outperformer” rating, while Scotia’s Phil Hardie bumped his target to $26 from $25 with a “sector perform” rating. The average is $26.67.
“Element capped off a record 2023 with solid Q4 results that came in line with street expectations, but a touch shy of our forecasts,” said Mr. Hardie. “Key highlights included: 1) management reaffirming 2024 guidance, 2) an announcement that the company will report financial results in US$ starting in 2024, and 3) a stronger-than-expected top line. A bit of a negative surprise was an almost 30 basis point sequential compression in net financial margins. That said, we had modelled a compression in both the gross and net margins through 2024 and into 2025, with the Q4/23 step down generally reflecting our expected run-rate for the first part of the year, and as a result not having a material impact on our estimates or outlook.
“Overall, a solid quarter that likely demonstrated solid execution, continued operational momentum, and progress against recently announced strategic initiatives.”