Summary

  • Brokers raise FedEx Corporation (NYSE: FDX) to ‘buy’, leading to a 2.63% surge in the company’ share price.
  • FedEx reported an uptick in business operations as rival firms undergo a slowdown in business.
  • Broker Daiwa Capital lifted its price target on FDX to US$275 from its previous target of US$240.

Brokers raise their price targets on FedEx Corporation (NYSE: FDX), leading to a 2.63% surge in the company’ share price. The stock price reached US$267.97 on September 25, 2023, as Daiwa Capital, Loop Capital and others increase their price target on the FDX.

As per EODHD/Others data, FDX has a mean recommendation rating of 2.1 on five. Here, one stands for a ‘strong buy’ rating while five indicates a ‘strong sell’ rating. Meanwhile, the consensus mean price target on the stock is US$279.67, an upside potential of almost 5% over Monday’s closing price.

Brokerage Daiwa Capital lifted its price target on FDX to US$275 from its previous target of US$240. The new price target represents a 5.3% upside over stock’s closing price on Monday.

Just like Daiwa Capital, many other brokerages have also raised their price targets on FedEx as the company reported a big quarterly profit beat.

Adjusted Q1 earnings rise as FedEx gains customers from rivals

The company reported an uptick in business operations as rival firms undergo a slowdown in business. FedEx reported that its ground unit picked up around 400,000 more packages per day as UPS customers shifted to alternatives after the company’s contract covering its unionized workforce expired.

At the same time, trucking firm Yellow ceased operations in July ahead of its expected bankruptcy. The company was a critical player in the less-than-truckload transportation segment.

Analysts believe that the customers gained from Yellow are expected to remain for a longer duration than those gained from UPS. However, FedEx and its competitors are likely to be affected by deflating demand and globally present recession risks.

Image Source: ©2023 Kalkine®; Data Source: Company Reports

Considering these risks, FedEx expects a flat revenue as compared to a year ago. In contrast, the company had previously announced its revenue growth to range from flat to a low-single-digit percentage.

Brokers bullish on FedEx

EODHD/Others data suggests that of the 31 analysts covering the stock, 9 recommend a ‘strong buy’ rating and 10 recommend a ‘buy’’ rating. The remaining 12 analysts have given FDX a ‘hold’ recommendation.

Loop Capital upgraded its price target on FDX to US$274 on September 22, 2023, while downgrading it to a ‘hold’ rating. TD Cowen upped its price target on FDX to US$290 and raised its rating to ‘outperform’.

Raymond James raised FDX to an ‘outperform’ rating and increased its price target on the stock to US$279. Meanwhile, Stifel upgraded FDX to a ‘buy’ rating, while decreasing price target on the stock to US$284.

Arc Independent downgraded the stock to a ‘hold’ rating, while Oppenheimer downgraded it to a ‘perform’ rating.

FDX Price Chart; Source: EODHD/Others

The stock closed at US$266.43 on September 25, 2023, marking YTD gains of 53.82%. As at the close of trade on Monday, the stock price rose by 21.2% over a 6-month period and by 78.41% over a 1-year period.