Goldman Sachs analyst Jordan Alliger has maintained their bullish stance on FDX stock, giving a Buy rating yesterday.
Jordan Alliger has given his Buy rating due to a combination of factors influencing FedEx’s current performance and future prospects. Firstly, FedEx’s third-quarter earnings per share exceeded expectations, coming in at $3.86 versus the consensus estimates of $3.30 to $3.43. This outperformance was largely attributed to a better-than-anticipated express margin, which was forecasted to be slightly negative but reported at 2.5%. Ground margins remained consistent with expectations, while less-than-truckload (LTL) margins did not meet the forecast, yet this did not overly detract from the overall positive outcome.
Alliger’s continuous endorsement of FedEx with a Buy rating stems from his positive outlook on the company’s cost reduction initiatives and the anticipated recovery in volumes. He supports FedEx’s DRIVE program, which aims to cut costs by $4 billion over the next two years, followed by an additional $2 billion in savings through Network 2.0 initiatives over the subsequent two years. The integration of FedEx’s operating networks into a single parcel network by June 2024 is expected to unlock significant productivity and efficiency benefits, further underpinning the rationale behind the Buy rating due to these strategic moves towards structural cost savings.
In another report released yesterday, Stifel Nicolaus also assigned a Buy rating to the stock with a $290.00 price target.
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FedEx (FDX) Company Description:
Founded in 1971, FedEx Corp. is a multinational delivery services company based in Tennessee. It provides transportation, e-commerce, and business services worldwide. The company offers integrated business solutions through operating companies competing collectively, operating collaboratively and innovating digitally under the FedEx brand.
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