- Camden National Corporation CAC shares were range-bound over 52 weeks, trading between $34.75 and $41.83. FleetCor Technologies, Inc. FLT shares are down 6 percent in a month, trading mostly below the $150 mark.
- Keefe, Bruyette & Woods analysts initiated coverage of both the companies with Outperform ratings.
- While Camden is the largest acquirable bank in Maine, FleetCor continues to be a significant organic growth story.
Analyst Travis Lan established a price target of $47 for Camden. He said that the Outperform rating reflected:
- Camden's accelerating growth outlook, with the recent acquisition as the SBM acquisition resulting in the former company entering higher-growth areas of Maine, namely the “economically vibrant” Southern Maine. This enhances Camden’s organic growth capacity.
- The company's M&A expertise has generated about 60 percent of total asset growth since 1994 and “should help supplement organic growth going forward."
- Camden’s expense control has been diligent and initiatives have been taken to spur fee income. These factors help the company generate “above-peer profitability.”
- Camden being the largest “acquirable” bank in Maine and has attractive scarcity value.
Analyst Sanjay Sakhrani established a price target of $185 for FleetCor. He said that although the company’s shares had gained 550 percent since the IPO in December 2010, there seemed to be “more room to run provided investors have a long-term view.”
“The fleet card industry is large and quite fragmented with a host of small businesses and large oil companies (for whom this business is non-core) dominating the market,” Sakhrani said, while adding that FleetCor is a large core player in this segment, with scale and lower capital costs than most other players.
FleetCor has generated robust operating results over the past 11 years, with 29 CAGR in revenues and 39 percent CAGR in adjusted net income. The company’s management has announced its goal of doubling the size of its business over the next four years.
Sakhrani further commented, “We believe the company is the largest among a handful of players in the global fleet segment, and there remains a significant organic growth story, given the majority of transactions still occur using cash and checks.”
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