WEX Mobility Volumes Improve, but 2027 Organic-Growth Outlook Faces Questions, Morgan Stanley Says

MT Newswires Live10-30 23:03

WEX (WEX) is seeing improving mobility transaction volumes, but activity excluding its BP (BP) contract is still roughly flat and persistent revenue estimate cuts in benefits and corporate payments raise doubts over the company's ability to sustain 5% to 10% organic growth in 2027, Morgan Stanley said in a note Friday.

Corporate payments and benefits revenue grew 3.5% and 4.8% against consensus estimates of 6.7% and 5.3%, and the investment firm raised its 2027 and 2028 adjusted diluted earnings-per-share estimates to $23.94 and $25.02, according to the note.

WEX now expects 2026 mobility organic revenue growth of 3% to 5%, up from 1% to 3% previously, the investment firm said.

The firm would turn more positive on the stock if transaction growth excluding BP reaches at least the level of the CASS Freight Shipments Index and revenue revisions in benefits and corporate payments become steadier, the note added.

Morgan Stanley kept its equal-weight rating and raised its price target to $188 from $178, citing near-term earnings support from elevated fuel prices and buybacks against the risk of fuel price compression.

Price: 185.19, Change: +1.72, Percent Change: +0.94

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