Transportation company FedEx Corporation (NYSE: FDX) was sized up by analysts after reporting fourth-quarter results that beat estimates.
The FedEx Analysts:
- Goldman Sachs analyst Jordan Alliger had a Buy rating and raised the price target from $316 to $333.
- Bank of America analyst Ken Hoexter had a Buy rating and raised the price target from $340 to $347.
- Morgan Stanley analyst Ravi Shanker had an Equal-weight rating and raised the price target from $210 to $215.
- Oppenheimer analyst Scott Schneeberger had a Perform rating and no price target.
- Stifel analyst J. Bruce Chan had a Buy rating and raised the price target from $303 to $327.
- Stephens analyst Daniel Imbro had an Overweight rating and $325 price target.
- Raymond James analyst Patrick Tyler Brown had an Outperform rating and raised the price target from $300 to $335.
"We were reasonably encouraged as well that the YOY monthly volumes ended on generally positive note," Alliger said.
The analyst said the company had an attractive valuation based on price-to-earnings metrics and has strong future catalysts.
"We think the shares should continue to react well to the EPS print, as well as management's guidance for FY 25 EPS."
Bank of America on FedEx: Strong cost savings from FedEx and the assessment of FedEx Freight were key highlights from the earnings report for Hoexter.
The analyst said FedEx saying it was conducting a review of FedEx freight was a surprise.
"We see momentum in structural cost takeout and potential value unlock from its strategic review of FedEx Freight," Hoexter said.
The analyst said FedEx Express volumes were below estimates and the company indicated it has not seen an increase in demand.
Morgan Stanley on FedEx: Fourth quarter results beat estimates, but the results were mixed by segment, Shanker said.
"There may still be a big gap to what is priced into the stock," Shanker said.
The analyst said FedEx Ground and FedEx Express missed several metrics during the quarter.
"We had previewed that F4Q may matter more than usual this year given the potential for payback from the F3Q surprise beat."
The analyst said FedEx did not provide much new information during the fourth quarter results. Shanker thinks the stock is trading higher based on the announced strategic review of FedEx Freight and potential short covering.
Oppenheimer on FedEx: Fourth quarter results were "solid" and guidance was "appropriate," Schneeberger said in a new investor note.
The analyst calls the strategic assessment of FedEx Freight "intriguing."
"The company has aggressively commenced multi-year expense reduction initiatives and its adjusted operating income has been improving despite a declining revenue environment," Schneeberger said.
Stifel on FedEx: New guidance for fiscal 2025 is above Street forecasts and shows consistency with strong execution of cost savings, Chan said.
"But the big news is FedEx Freight is under strategic portfolio review - likely a spinoff, in our view," Chan said.
The analyst said the freight division went from being a "family outcast" to the most profitable division in the portfolio. Chan said the potential freight spinoff is a "tantalizing opportunity for investors."
"With peer valuations at nearly double that of FedEx, such a move makes sense to us."
Stephens on FedEx: Better profitability for FedEx's Ground and Freight segments helped beat consensus estimates, Imbro said.
The analyst said FedEx had "softer margins" for the FedEx Express segment.
"Looking ahead to fiscal 2025, preliminary adj. EPS guidance of $20-$22 is ahead of investor expectations," Imbro said.
Raymond James on FedEx: A focus on attacking costs has paid off for management, Brown said.
"We believe palpable change is afoot as FDX's DRIVE initiatives continue taking hold likely driving better margins, earnings, and FCF in out years than appreciated," Brown said.
The analyst said the announced strategic review of FedEx Freight could show a continued focus on driving shareholder value.
"We believe management's shift toward integrating its Express & Ground offering, its focus on attacking costs across various buckets, enhanced capital allocation scrutiny, and a more shareholder-friendly capital return program all set the stage to drive improved shareholder returns," the analyst said.
FDX Price Action: FedEx shares are up 14.75% to $294.20 on Wednesday. The stock hit a new 52-week high of $294.68 during Wednesday's trading session.