Market Overview

FedEx Price Target Increased Into Holiday Season

FedEx Price Target Increased Into Holiday Season

In addition to delivering holiday presents to tens of millions of people across the world, FedEx Corporation (NYSE: FDX) is expected to deliver an attractive return to investors, at least according to Scott Schneeberger of Oppenheimer.

In a research report Monday, Schneeberger maintains an Outperform rating on FedEx's stock with a price target increased to $210 from a previous $184.

Rating Justification

According to Schneeberger, FedEx is well positioned to achieve its own guidance, which calls for a 10 percent year-over-year volume growth from Black Friday through Christmas Eve. The analyst noted that initial comScore data indicate the period started off on a positive note, as computer e-commerce sales volume rose in the teens from Thanksgiving through Cyber Week while mobile device sales was even better.

Schneeberger noted that FedEx is committed to achieving its guidance through slightly fewer seasonal hires and should see benefits pay off from investments in automated technologies and efficiencies.

Positive Look Ahead

FedEx's CEO Fred Smith is also optimistic on the U.S. economy's growth prospects and told CNBC in an interview last week that President-elect Donald Trump's economic policies are "fabulous" and should result in "higher growth."

Schneeberger also stated that FedEx has momentum on its side as the company reported an earnings per share beat relative to its own expectations in each of the past four quarters. Despite higher oil and jet fuel expenses since the fiscal first quarter, the analyst remains optimistic this trend can continue.


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