How Analysts View FedEx Stock ahead of Q4 Earnings


Jun. 21 2019, Updated 2:44 p.m. ET

Analysts trimmed target price

Persistent weakness in its Express business and global trade slowdown concerns have made analysts slightly cautious about FedEx’s (FDX) near-term growth prospects. Therefore, the majority of the investment research firms have trimmed their target price on the stock.

Most recently, on June 11, Credit Suisse (CS) analyst Allison Landry lowered his target price on FedEx to $184 from $241. Before this, on June 3, UBS Group (UBS) analyst Thomas Wadewitz cut his target for the stock by $12 to $136. Wadewitz said that FedEx’s business in China could be affected due to the Chinese government’s investigation into the wrongful delivery of Huawei Technologies’ packages. FedEx’s Chinese operations account for 6% of its total revenue.

Citing concerns over China’s ongoing investigations of FedEx, Bank of America (BAC) and Morgan Stanley (MS) have also trimmed their target prices by $15 and $5, respectively, to $173 and $143.

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Consensus recommendations

Although analysts have cut their target prices for FedEx stock, most are still bullish and recommend a “buy.” About 68% of the 28 analysts covering FedEx have a bullish recommendation, 25% recommend holding it, and the remaining 7% have a bearish stance. Their average target price of $197.69 implies a 17.3% upside over the next year.

To gain exposure in the air freight and courier service industry, investors can invest in the iShares Transportation Average ETF (IYT), which allocates 20.7% of its fund to the space. The ETF has gained 13.5% this year, underperforming the S&P 500 and Dow Jones, which have risen 17.8% and 14.7%, respectively.


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