In Wake Of TNT Deal, Wall Street Loves FedEx

Citi and Deutsche Bank analysts reacted to the FedEx Corporation FDX $4.8 billion acquisition of TNT Express NV TNTEY with unanimous praise for both the timing and execution of the deal.

Citi said that FedEx shares present "compelling value" at current valuations, while Deutsche Bank argued that this will be one of FedEx's "most accretive acquisitions." Citi placed a price target of $200 on the shares. Deutsche Bank put the target slightly higher at $209.

Related Link: Why The FedEx-TNT Deal Makes Sense

However, Deutsche Bank did caution that this deal has "significantly larger integration risks" than any of FedEx's other acquisitions. Despite that and the fact that the deal will not impact FedEx's earnings until 2018, the acquisition will provide FedEx with a critical European infrastructure, helping the company benefit from a recovering European economy.

Citi heaped praise on FedEx's timing, given the strong U.S. dollar and uncertainty around TNT as a standalone company. Both of those factors combined to lower the final cost to FedEx, the analysts argued.

FedEx gained 2.7 percent Tuesday to $171.16. The stock is indicated marginally higher to $171.70 in pre-market trading.