Element Fleet Management a “Top Pick”, National Bank says

Confidence.

That’s what National Bank Financial analyst Jaeme Gloyn got from a recent visit to Mexico to learn about Element Fleet Management’s (Element Fleet Management Stock Quote, Chart, News, Analysts, Financials TSX:EFN) opportunities there.

Calling the stock a “Top Pick” and a “core holding”, the analyst detailed the company’s opportunity in Mexico.

“EFN has ample opportunity for growth in Mexico,” he wrote. “EFN is set to benefit from macro tailwinds in Mexico including near-shoring driving foreign direct investment and increased investments in transportation and mobility. Opportunity for further market share growth as 65 per cent of fleets are self-managed and 20 per cent of the market is banks and OEMs not offering fleet services. EFN noted capturing 10 per cent of self-managed fleets represents $175-million in incremental revenue (131 per cent of 2024 Mexico revenue). Share of wallet growth in Mexico as services penetration lags Canada and U.S. EFN has proven their success in adding services revenue as EFN has invested in the sales structure and operations and advisory teams. There is opportunity for further penetration as 59 per cent of fleets have more than 2 units per VUM.”

As reported by the Globe and Mail, Gloyn September 27, raised his price target on EFN from $34.00 to $37.00, while maintaining his “Outpeform” rating on the stock.

“We see lots of low-hanging revenue/expense saving fruit as EFN executes the digitization and automation vision,” The analyst said of the company’s broader opportunity. “The Autofleet acquisition is an important accelerator.”