Goldman Sachs: FleetCor No Longer A Conviction Buy

In a report published Tuesday, analysts at Goldman Sachs have removed

from their Americas Conviction List, while maintaining a Buy rating on the company. There appear to be limited near-term catalysts for the company, the analysts said. The price target has been raised from $162 to $185. Despite removing the company from its Conviction List, Goldman Sachs continues to have faith in FleetCor's growth story, which is influenced by the consolidation of the global fleet card segment. On a global scale, the industry is likely to see significant earnings growth, largely due to accretive M&A in Europe. "However, we see fewer immediate catalysts for the stock as we see European deals likely taking somewhat longer to materialize, and lower gas prices are likely to remain a near-term headwind over the next few quarters," the analysts added. Since oil companies are looking to either sell or outsource their operations, FleetCor is likely to drive significant accretive opportunities following its acquisition of Comdata, with more than 20 percent EPS growth over the long-term. According to Goldman Sachs, "Importantly, we see the company as an early leader in the B2B payments market, where we see a $17 bn market opportunity over the next 10 years."