Key Takeaways
FedEx ( FDX ) is set to report fiscal third-quarter results after the closing bell Thursday, and analysts are mostly bullish on the shipping giant's stock.
Of the 15 analysts who follow FedEx stock and are tracked by Visible Alpha, 12 call it a "buy," two a "hold," and one a "sell." They have an average price target of $318.60 on the stock, more than 31% higher than Friday's closing level just above $241.
Analysts expect adjusted earnings per share (EPS) to have risen 20% from a year ago to $4.64 and revenue to have edged 1% higher to $21.97 billion. Revenue declined year-over-year in eight of the previous nine quarters, with both FedEx and shipping rival UPS ( UPS ) experiencing diminishing demand after the pandemic.
Morgan Stanley Says FedEx Likely Had 'Solid Peak Season'
Morgan Stanley analysts, who have an "underweight" rating and $200 price target on the stock, wrote this month that they believe FedEx had a "solid peak season but no major acceleration in underlying demand/macro trends."
The analysts said they "see headwinds from an overall compressed peak season," along with one more month of unwinding its U.S. Postal Service partnership. They also noted the likelihood that FedEx's DRIVE program—which the company said is expected to create "permanent cost reductions" of $2.2 billion—would be "not as helpful as expected" in the third quarter.
Last quarter , the company missed estimates and said it planned to spin off its FedEx Freight segment into a standalone public company over the next 18 months. Citi analysts had said such a move could "unlock value."
FedEx shares, which are down 5% over the past 12 months, closed last week at their lowest level in more than a year.
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