Barclays Reiterates Overweight Rating on FedEx (FDX)

Barclays analyst Brandon Oglenski reiterated an Overweight rating and $350.00 price target on FedEx (NYSE: FDX).

The report said, "Brandon Oglenski provides his analysis of several key topics for FDX. While FedEx results in 2024 remain constrained by soft macro demand, he sees meaningful earnings upside from efforts to operationally merge the US Express and Ground operations. Further, with the recent announcement to explore strategic alternatives for the Freight business could yield up to $30bn in value for FedEx shareholders for an equity value that currently trades at ~$70bn. He notes that investors are rightfully concerned about integration risks, especially considering significant integration challenges following the acquisition of TNT European operations over the past decade. However, significant review of business systems and rollout of network integration in smaller markets such as Canada, Alaska and Hawaii should lead to best practices for the combination efforts across the continental states starting in calendar 2025. He sees incremental retirement of aircraft as a measure of real capacity reduction. If network consolidation is properly executed, a reduction in overlapping cost could drive nearly $4-5bn in annual cost reduction, which has the potential to drive a doubling in operating earnings of the company. Beyond the merger of Express and Ground networks, he is especially bullish on management plans for the assessment of the Freight LTL business, which is the largest non-union less-than-truckload businesses in the US. He suspects a standalone FedEx Freight business could fetch north of $30bn in enterprise value, representing a meaningful value opportunity for FedEx shareholders."

For an analyst ratings summary and ratings history on FedEx click here. For more ratings news on FedEx click here.

Shares of FedEx closed at $295.47 yesterday.

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