FedEx (FDX) PT Raised to $339 at Evercore ISI

Evercore ISI analyst Jonathan Chappell raised the price target on FedEx (NYSE: FDX) to $339.00 (from $318.00) while maintaining a Outperform rating.

The analyst comments "FDX posted adjusted F4Q24 EPS of $5.41, coming in slightly ahead of our forecast of $5.28 and the average Street estimate of $5.34. The upside came primarily from the Freight (LTL) segment and a slightly higher Ground margin than anticipated, which more than offset another weak performance for overall volumes and Express margins (4.1%). Importantly, FDX’s FY25 guidance range of $20-22, comes with a midpoint that is less than 0.4% above the average Street projection…but is more than 2% above what we perceived to be the buy-side bogey. Upside, more confidence in cost-led execution of a massive business integration, and a believable bridge to mid-teens EBIT growth next fiscal year are all partially behind the after-market strength in the stock. However, the real kicker comes from FDX’s announcement that it is conducting an assessment of the role of the Freight unit in the enterprise, a statement that lends credibility to a sumof-the-parts (SOTP) upside potential given much higher multiples at similar LTL franchises. We’ve done a quick analysis that we detail below in the event that the Board believes it can unlock more value through the separation of the businesses (spoiler alert: the math says it can). Our fiscal year 2025 estimate is largely unchanged (down one penny), though we remain roughly 1% above the midpoint of the new guidance range. We believe the key to the FDX investment thesis is continued execution on its DRIVE savings program and a smooth consolidation of the Ground/Express businesses, rather than relying on a macro that is increasingly uncertain, and although neither, but especially the latter, is risk-free, recent execution wins point to the guidance range remaining attainable throughout the year. We raise our price target to $339 (from $318) and we reiterate our Outperform rating on FDX shares."

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