UPDATE: Oppenheimer Reiterates FedEx at Outperform on Disappointing Q3 Profit

In a report published by Oppenheimer, analyst Patrick Villani reiterated his Outperform rating and $124 price target on FedEx

. Oppenheimer reported that, “Despite F3Q13 revenue increasing to $10.95B vs. our estimate/consensus of $10.83B/$10.85B, F3Q13 adj'd EPS of $1.23 (-20% y/y) was below our estimate/ consensus of $1.35/$1.38. Adj'd operating margin of 5.8% was shy of our 6.4% estimate primarily on accelerated demand mix toward lower yielding international services in FedEx Express. Though this lent to near-term pain, we continue to anticipate long-term gain, as FedEx Ground and FedEx Freight were solid and FedEx Express will decrease US<=>Asia capacity by more effectively placing lower yielding loads into lower cost networks. Incremental to FedEx's realignment plan targeting improving annual profitability by $1.65B by FY16, we continue to anticipate 20%+ annual EPS growth in FY14-FY16. Reiterate Outperform/$124 target.” Shares of FedEx closed at $99.13 on Wednesday.