Shares of FedEx Corp
The results came amid an exciting earnings season. Here are some key analyst takeaways from the release.
- BMO Capital Markets analyst Fadi Chamoun reiterated a Market Perform rating, while raising the price target from $290 to $310.
- Goldman Sachs analyst Jordan Alliger maintained a Buy rating, while bumping the price target from $291 to $324.
- Oppenheimer analyst Scott Schneeberger reaffirmed a Perform rating on the stock.
The mid-point of the earnings guidance for fiscal 2024, of $5.34, "is roughly 1% lower than $5.41 consensus and our $5.38 estimate," the analyst further wrote.
Goldman Sachs: Express generated margins of 2.5% in the quarter, "instead of the slightly negative margin that we had forecast," Alliger said. He added that margins at Ground were broadly in-line, while LTL (less than truckload) margins fell short.
Although FedEx's volumes continue to decline, "we remain hopeful that further moderation in declines is ahead, with eventual inflection perhaps as we move into the calendar 2024 peak season," the analyst wrote. Higher volumes and an improved cost structure could lead to a "meaningful margin recovery" especially at Express, he further stated.
Oppenheimer: FedEx's revenue declined by 2% year-on-year primarily due to "volume weakness, lower fuel and demand surcharges, and a mix shift toward lower yielding international export services," Schneeberger said in a note.
"Segment adjusted operating income improved due to lower structural costs resulting from DRIVE initiatives and the benefit from one additional operating day, partially offset by lower revenue," the analyst wrote. "In F3Q24, its DRIVE initiatives delivered $550M in cost savings, on the way to a total of $1.8B of DRIVE expense-reduction contribution in FY24," he added.
FDX Price Action: Shares of FedEx had risen by 7.71% to $285.22 at the time of publication on Friday.
