FedEx Gets Another Buy Rating on Improved Business Conditions By Investing.com

By Dhirendra Tripathi

Investing.com – FedEx (NYSE:FDX) shares will benefit from an uptick in economic activity, according to KeyBanc analyst Todd Fowler, who upgraded the stock to overweight with a price target of $350.

The price target is almost 20% from the stock’s current price. FedEx shares dipped 0.3% on Tuesday.

Last month, analysts at three brokerages — Robert W. Baird, Goldman Sachs (NYSE:GS) and Berenberg Bank –reiterated their buy ratings on FedEx stock. Robert W. Baird has a price target of $312 and Berenberg $325 with Goldman Sachs’s $365 being the highest of the three, a 25% premium to the stock’s current price.

Fowler sees a rational pricing environment and share opportunity as United Parcel Service Inc (NYSE:UPS) takes a more measured approach to volume growth, the combination of which support an improved ground outlook.

“Further, we are encouraged by indications of resilient airfreight dynamics with demand improving against limited incremental capacity which may sustain Express load factors and margins intermediately. Lastly, we view broader improvements in industrial production and economic activity as increasingly favorable for B2B demand,” he wrote.

The analyst pointed out that air cargo capacity remains constrained and ground yields were strengthening while business-to-consumer shipments in e-commerce support improved density.