Review of Element Fleet Management Corp

SEP 11, 2025 - Recent results have been supported by strong recurring revenue from services, operational efficiency, and margin expansion across its core markets. Near-term headwinds include moderate economic uncertainty in North America and Europe, which could affect fleet utilization and new vehicle orders, as well as exposure to interest rate fluctuations on lease financing. However, the company’s growing services segment, global scale, and solid cash flow generation position it well for continued revenue and margin growth. While its share price has been relatively steady, EFN trades at a forward P/E discount to peers, and we view its valuation as attractive given the recurring nature of its services revenue and potential for further margin expansion. Given the company’s relative cheap valuation and operational efficiency, we are increasing our rating by one notch to ‘B+’.