In a report released today, Ravi Shanker from Morgan Stanley maintained a Sell rating on FedEx (FDX – Research Report), with a price target of $200.00.
Ravi Shanker has given his Sell rating due to a combination of factors impacting FedEx’s financial outlook. The company is facing structural challenges in its growth and earnings potential, particularly as it approaches the second half of fiscal year 2025. Shanker anticipates that FedEx’s earnings for the third quarter will fall below market expectations, with an adjusted EPS forecasted at $3.90, significantly lower than the consensus estimate of $4.61.
Additionally, Shanker projects that FedEx’s fiscal year 2025 earnings will be below the company’s guidance, with potential headwinds from a compressed peak season and lower fuel prices. While the DRIVE initiative aimed at cost savings is underway, Shanker expresses concerns that the anticipated savings may not materialize as expected, particularly in Europe. The competitive environment and mix headwinds are also expected to persist, potentially hindering revenue growth. These factors contribute to Shanker’s cautious outlook and his decision to rate FedEx’s stock with a Sell recommendation.
Based on the recent corporate insider activity of 62 insiders, corporate insider sentiment is neutral on the stock.