On the rise
Shares of Element Fleet Management Corp. jumped following the late Monday release of better-than-expected third-quarter results.
The Toronto-based company reported operating earnings per share of 36 cents, topping the Street’s projection by 4 cents, and originations of $2.72-billion, beating the consensus estimate of $2.02-billion.
It also raised its quarterly dividend by 20 per cent, or 8 cents, to 48 cents per share.
“Q3/23 results re-affirmed why EFN is our high-conviction #1 best idea as EPS was solidly ahead of forecast and consensus with originations well ahead of forecast and consensus, providing further evidence OEM production appears back to normal levels, which we think is important to provide another driver of EPS growth,” said RBC Dominion Securities analyst Geoffrey Kwan in a note.
“2024 EPS guidance appears conservative as Q3/23 run-rate EPS is already at the lower end of guidance and the F/X assumption is below the current rate. We think EFN has the best risk-reward profile in our coverage universe, with significant growth potential; strong defensive attributes; multiple potential catalysts; and valuation that is mispriced (13.5 times P/E and 9.1-per-cent FCF yield on 2024 estimates).”