Investment firm Raymond James lowered its price target for freight company FedEx (NYSE:FDX) from $325 to $300 per share because tonnage (the total weight of freight transported measured in tons) is returning to normal levels, and pricing trends are easing. Despite this, the firm is still optimistic and notes that FedEx’s upcoming Q4 results and guidance are key, especially with its DRIVE initiative aimed at saving $2.2 billion annually by FY25.
Five-star analyst Patrick Brown says that FedEx’s success depends on these cost-saving measures as the freight market remains weak. Nevertheless, even with challenges like fewer operating days and higher costs, FedEx is expected to guide to about $7 billion in earnings for FY25, which is slightly below the investment firm’s estimates but seen as “good enough” given the recent struggles.
As a result, Brown kept his Buy rating on FedEx and expects better margins, earnings, and shareholder returns from the DRIVE initiative. It’s worth noting that, so far, Brown has enjoyed a 75% success rate on his ratings, with an average return of 20.1% per rating.
Is FDX Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on FDX stock based on 10 Buys, four Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 10.5% rally in its share price over the past year, the average FDX price target of $299.83 per share implies 17.24% upside potential.
