FedEx: New Perspectives and Optimized Value Creation in Focus

The analyst from BofA Securities, Ken Hoexter, reiterated his buy recommendation for FedEx Corporation and raised the price target from $325 to $348. This upgrade follows the release of FedEx's latest quarterly figures. With an adjusted earnings per share of $4.05, the company exceeded the consensus estimate of $3.91. However, the quarterly revenue of $22 billion slightly missed the expected $22.11 billion. Regarding future revenue development, FedEx now anticipates nearly constant annual revenue compared to the previous year, instead of a previously forecasted increase in the low single-digit percentage range. CEO Raj Subramaniam emphasized the potential for significant value creation through improved strategic, operational, and financial measures within the company. Particular focus is on FedEx Freight, which will retain its name but grow through an expanded sales strategy and implement automated systems to reduce supplier expenses. As a result of these measures, FedEx could become the largest publicly traded less-than-truckload provider in North America. Ken Hoexter forecasts a sum-of-the-parts valuation that suggests a potential stock valuation of $348. For the fiscal years 2025 and 2026, the analyst increased his earnings estimates by 2 percent, now estimating $19.45 and $23.15 per share, respectively. Overall, FedEx benefits according to Hoexter from the growth of cross-border trade and displays structural pricing adjustments, while carriers work to optimize their returns.