BofA downgrades Wex after ‘confidence breaking’ quarter

BofA downgraded Wex (WEX) to Neutral from Buy with a price target of $164, down from $211. The stock in midday trading is down 19%, or $35.23, to $151.55. The firm views the company’s Q4 earnings report as “confidence breaking.” Wex’s guidance is below consensus and it also lowered its long term growth targets to 5%-10% for organic revenue, which reflects the “idiosyncratic” growth challenges the company is facing, the analyst tells investors in a research note. BofA also sees increased cyclicality and competitive pressure weighing on investor sentiment. Wex has become a “show me” story and it will take some time for confidence to be rebuilt and investor sentiment to improve, contends the firm.