Analyst Thomas Wadewitz from UBS maintained a Buy rating on FedEx and keeping the price target at $314.00.
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Thomas Wadewitz has given his Buy rating due to a combination of factors that indicate potential growth and improvement for FedEx. The company’s second-quarter earnings are expected to show an improvement in package performance, with anticipated year-over-year growth in domestic express and ground volume. This growth is supported by FedEx’s cost reduction initiatives, which aim to offset international business pressures, such as tariffs. Additionally, there is potential for earnings per share to exceed consensus estimates, suggesting room for upside.
Furthermore, FedEx’s strategic initiatives, including cost savings and an improving domestic package pricing environment, are expected to drive sequential earnings improvement in the third quarter. Despite challenges in the less-than-truckload (LTL) segment, the upcoming spin-off is anticipated to bolster FedEx’s stock. The company’s valuation, based on modest revenue growth and margin expansion, supports a positive outlook, with a price target derived from a 14x P/E multiple applied to projected earnings. These factors collectively underpin the Buy rating for FedEx.
In another report released on December 4, Susquehanna also maintained a Buy rating on the stock with a $345.00 price target.