11:30 AM EDT, 10/29/2024 (MT Newswires) -- Corpay's ( CPAY ) earnings per share growth in 2025 is expected to be around the mid-teens despite a share price decline due to the announcement of lower-than-expected organic growth for Q4 and changes to the Chief Executive Ronald Clarke's compensation plan, Morgan Stanley said in an earnings preview on Tuesday.

The firm said its positive outlook is driven by growth in lodging and anticipated buybacks. While the near-term estimates for vehicle payments have been reduced due to fuel price decreases, expectations for 2025 to 2026 have been raised.

"We believe consensus corporate payments estimates are too low in 2025, particularly when factoring in inorganic contribution and recent ex. channel growth trends," the firm added.

Morgan Stanley said that a potential Federal Emergency Management Agency contract might boost Corpay's ( CPAY ) lodging segment, though the impact is likely modest based on past disaster-related contracts.

Investor sentiment is optimistic, driven by the company's potential acceleration story in 2025 and attractive EPS growth, however, there are potential challenges in executing these targets, according to the preview.

Morgan Stanley increased its price target on Corpay's ( CPAY ) stock to $325 from $275 and reiterated its equal-weight rating.

Price: 335.32, Change: -3.60, Percent Change: -1.06