This post was originally published on this site
Several sell-side analysts hiked their price target on FedEx Corporation (NYSE:FDX) in the aftermath of the company’s DRIVE event in New York.
Brokers argue that yesterday’s event has increased visibility into crucial transformational changes that aim at improving profitability and expanding margins. Raymond James analysts upgraded FDX stock to Outperform from Market Perform.
They believe the announced changes will “drive better margins, earnings, and FCF in out years.”
“We believe that mgmt.’s palpable shift in direction toward integrating its primary Express & Ground offering, its keen focus on attacking costs across various functional buckets (backbone of its DRIVE initiatives), enhanced capital allocation scrutiny (6.5% capex to sales going forward), and a more shareholder-friendly capital return program, all set the stage to drive improved shareholder returns in time,” the analysts said in an upgrade note.
Citi analysts hiked the price target by $10 to $285 per share as “one FedEx checks many boxes.”
“We think FedEx delivered more than enough to attract new investors,” the analysts said.
Similarly, BofA analysts reiterated a Buy rating and a $305 per share price target following the DRIVE analyst meeting. Hoexter continues to see FedEx as one of the top Transport picks “and one of a few with an idiosyncratic backdrop.”
FedEx shares closed 1.5% higher yesterday and are up a further 0.6% in pre-market Thursday.
