Analyst Ken Hoexter of Bank of America Securities reiterated a Buy rating on FedEx (FDX – Research Report), reducing the price target to $270.00.
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Ken Hoexter has given his Buy rating due to a combination of factors including FedEx’s strategic initiatives and recent business developments. FedEx is actively engaging in structural cost transformation efforts through its Network 2.0, DRIVE, and Tri-Color initiatives, which are expected to enhance operational efficiency. Despite facing tariff pressures, particularly affecting international B2B volumes, FedEx is focusing on capacity utilization to maintain its competitive edge.
Additionally, FedEx’s new partnership with Amazon to handle large, heavy packages is anticipated to be financially beneficial, contributing positively to yields and profitability. This deal allows FedEx to leverage its capabilities in managing heavy shipments across the U.S., although Amazon will not become its largest customer. Furthermore, while domestic e-commerce volumes are on target, FedEx is working to improve its freight margins and expand its small business customer base, which is currently underpenetrated compared to its peers. These strategic moves underpin Hoexter’s confidence in FedEx’s growth prospects, justifying the Buy rating.
Hoexter covers the Industrials sector, focusing on stocks such as Canadian Pacific Kansas City, CSX, and XPO. According to TipRanks, Hoexter has an average return of 1.2% and a 46.29% success rate on recommended stocks.
In another report released today, Barclays also maintained a Buy rating on the stock with a $350.00 price target.