BofA Securities analyst Ken Hoexter has reaffirmed a Buy rating on FedEx Corporation (NYSE: FDX) and has upped the price target from $325 to $348. In a recent development, the company posted adjusted earnings of $4.05 per share, surpassing the consensus estimate of $3.91. However, quarterly revenue fell slightly short of expectations, coming in at $22 billion compared to the analyst consensus estimate of $22.11 billion.
FedEx has adjusted its revenue outlook, now projecting a flat year-over-year revenue performance as opposed to the previously anticipated low single-digit percentage increase. CEO Raj Subramaniam has highlighted the company’s potential to drive significant value creation through enhanced strategic, operational, and financial execution.
Analyzing the company’s sum-of-the-parts valuation, Hoexter sees the potential value per share at $348. Moreover, FedEx Freight is set to retain its name, collaborate closely with FedEx, bolster its dedicated sales force by around 300 employees, introduce a new pricing and invoicing system for Less-than-truckload services, and streamline vendor spending through increased automation.
The separation of FedEx Freight is expected to unlock value and position the company as the largest pure-play public North American less-than-truckload carrier. Hoexter has revised the EPS estimates for FY25 and FY26 upward by 2%, now forecasting $19.45 and $23.15, respectively, compared to the earlier estimates of $19.15 and $22.80.
Overall, Hoexter notes that FedEx is well-positioned to benefit from the growth in cross-border trade and is demonstrating structural pricing gains as carriers strive to enhance investment returns. As of the latest update, FDX shares were trading up by 0.97% at $278.56 on Friday.
In other news, weight-loss market experts have reportedly shown interest in Novo Nordisk stock following a significant drop in the aftermath of a drug trial miss, marking the worst decline since 2002.
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For the latest stock analysis on FedEx, access the free stock analysis report for FDX. This article originally appeared on Benzinga.com, detailing FedEx’s positioning as the largest pure-play North American less-than-truckload carrier post-separation. The content is copyrighted to Benzinga.com, with all rights reserved. Benzinga does not offer investment advice.
