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WEX Analyst Highlights Cost Savings, Cross-Sell Revenue Potential Post Q3 Beat

Anusuya Lahiri
·1 min read

  • Credit Suisse analyst Nik Cremo reiterated Neutral on WEX Inc (NYSE: WEX) with a $195 price target.

  • WEX's Q3 2022 revenue exceeded consensus estimates by 5%, with help from higher fuel prices, deposit revenue, and higher-than-expected late fees. Meanwhile, Q3 adjusted EPS beat consensus by a smaller margin of +2% due to higher-than-expected credit losses attributable to smaller OTR fleets and fraud losses that remained elevated at ~11bps.

  • Cremo highlighted WEX's plans to deliver $100 million in run-rate operating expense savings by the end of 2024 (but plans to reinvest ~50%) and mentioned the potential to exit 2023 at a ~$50 million -$65 million run-rate.

  • He emphasized the disclosure of ~$28 million in Q3 run-rate Corporate Payments cross-sell revenue to WEX's larger OTR (Fleet) customers and that the company is now working through a qualified sales lead list.

  • He noted that WEX launched Flume on schedule in Q3, its SMB direct solution to help businesses pay and get paid, and has begun cross-selling the product to its >450,000 SMB fuel customers.

  • Barclays analyst Ramsey El-Assal maintained WEX with an Overweight and raised the price target from $211 to $213.

  • Price Action: WEX shares traded higher by 1.14% at $164.67 on the last check Monday.

Latest Ratings for WEX

Date

Firm

Action

From

To

Feb 2022

Mizuho

Maintains

Buy

Feb 2022

Credit Suisse

Maintains

Neutral

Jan 2022

Mizuho

Maintains

Buy

View More Analyst Ratings for WEX

View the Latest Analyst Ratings

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