Analyst Ravi Shanker from Morgan Stanley maintained a Sell rating on FedEx (FDX – Research Report) and keeping the price target at $200.00.
Ravi Shanker has given his Sell rating due to a combination of factors affecting FedEx’s financial outlook. The company’s recent fiscal guidance cut has heightened concerns about ongoing structural challenges in its Parcel business, which may overshadow the benefits of its cost reduction initiatives. Shanker anticipates that FedEx’s normalized earnings per share (EPS) will trend towards the mid-teens, rather than rising to the mid-$20s as previously expected.
Shanker also highlights that FedEx’s earnings quality remains a concern, with a significant gap between GAAP and non-GAAP earnings before interest and taxes (EBIT). The company’s management has pointed out weaknesses in the industrial economy and demand uncertainties, which have contributed to the downward revision of their fiscal year guidance. Additionally, structural changes in the eCommerce market are seen as a more significant factor impacting earnings pressure than cyclical macroeconomic conditions. As a result, Shanker maintains a price target of $200 for FedEx, reflecting a cautious outlook on the stock.
In another report released today, Loop Capital Markets also downgraded the stock to a Sell with a $221.00 price target.
Based on the recent corporate insider activity of 62 insiders, corporate insider sentiment is neutral on the stock.
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