FLT rallied over 1% on Monday following a negative trading update, with US uncertainty weighing on their FY25 outlook – not an uncommon message of late. They downgraded earnings by ~18%, although they did throw in a buy-back of up to $200mn in an attempt to cushion the blow. The stock’s reaction implied it was no big surprise, and the aggressive decline through 2025 was already pricing in plenty of bad news. With FLT expecting weaker trading conditions through the May/June period due to macro uncertainty, we may see a potential case of under-promise and over-deliver from FLT later in the year. As things get tough, FLT is doing a solid job on the costs front, including being on track to reduce the headcount by 5% by year-end, plus they announced a targeted 15-20% capital expenditure reduction for FY26 – a solid footing for when things improve.
- We can see FLT drifting lower over the coming weeks, but it looks good value if it makes new lows for FY25.
MM is neutral towards FLT
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