Analyst Thomas Wadewitz from UBS maintained a Buy rating on FedEx and increased the price target to $314.00 from $293.00.
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Thomas Wadewitz has given his Buy rating due to a combination of factors including FedEx’s better-than-expected first-quarter earnings per share, which surpassed both the consensus and his own estimates. This positive performance was driven by stronger revenue growth and improved margins in the Federal Express segment, despite some challenges in the Freight operating margin. The market’s low expectations prior to the earnings release also suggest a potential positive reaction to FedEx’s stock.
Additionally, FedEx’s domestic package volumes and yields have shown significant improvement, supporting the company’s revenue growth forecast of 4% to 6% for the fiscal year. Although there are concerns about the lack of leverage and EBIT growth due to international and product mix headwinds, Wadewitz anticipates that cyclical improvements in freight activity and easing trade-related expenses could provide a more favorable environment for EBIT growth in the future. Consequently, he has adjusted the price target to $314, reflecting a forward-looking valuation based on expected earnings in 2027.
In another report released today, Citi also maintained a Buy rating on the stock with a $279.00 price target.
Based on the recent corporate insider activity of 44 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of FDX in relation to earlier this year.