Market Overview

FleetCor Defended By Wells Fargo Against Citron Short Report: 'We Disagree With The Thesis'

Share:
FleetCor Defended By Wells Fargo Against Citron Short Report: 'We Disagree With The Thesis'

Shares of FleetCor Technologies, Inc. (NYSE: FLT) plunged 5.7 percent Tuesday. While shares responded to a negative report by Citron Research, “we disagree with the thesis and the facts supporting it,” Wells Fargo’s Timothy Willi said in a report.

The analyst reiterates an Outperform rating on the stock, while setting a valuation range of $170-$180.

Addressing Concerns Mentioned By Citron

The main thesis in Citron’s report indicated that FleetCor’s fee structure is predatory, since it’s based on the fact that the company generates 56 percent of its revenue from customers, rather than from merchants, while WEX Inc (NYSE: WEX) has a fee structure that generates only 12 percent of total revenue from customers.

Related Link: Citron Goes Short On FleetCor

Willi mentioned the following to refute the thesis mentioned in Citron’s report:

  • WEX generated at least 34 percent of its consolidated revenue in 2016 from customers. Moreover, within the Fleet segment, at least 39 percent of the company’s revenue that year was generated from customers. Although FleetCor’s 57 percent is a higher figure, it represents a “more comparable mix to WEX,” Willi noted.
  • Referring to the fuel card businesses of both companies, the analyst stated that although FleetCor’s generated 44 percent more revenue-per-transaction than WEX in 2016, “we believe the premium is explained by business mix and not company-specific fee structures.”

Latest Ratings for FLT

DateFirmActionFromTo
Nov 2020Credit SuisseMaintainsNeutral
Nov 2020Morgan StanleyMaintainsEqual-Weight
Aug 2020Deutsche BankMaintainsBuy

View More Analyst Ratings for FLT
View the Latest Analyst Ratings

 

Related Articles (FLT)

View Comments and Join the Discussion!

Posted-In: Citron ResearchAnalyst Color Long Ideas Short Sellers Short Ideas Reiteration Analyst Ratings Trading Ideas Best of Benzinga

Latest Ratings

StockFirmActionPT
KALUBenchmarkUpgrades
YEXTDA DavidsonMaintains20.5
BYDB of A SecuritiesMaintains47.0
SAICMorgan StanleyMaintains98.0
PVHMorgan StanleyMaintains104.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com