FedEx (FDX) has had a great run since its last earnings report nearly three months ago. It’s getting no love today, however.
Getty Images The express-delivery company has gained 28% during the past three months, trumping the 18% return from United Parcel Service (UPS), the 4.6% gain in J.B. Hunt Transport Services (JBHT) and the 0.2% rise in Expeditors International of Washington (EXPD).
And there’s no reason FedEX can’t keep on keeping on, says Citigroup’s Christian Wetherbee and Seth Lowry. They write:
[We] believe further upside remains, as the current investor base appears to be playing for a meaningful improvement in profitability, led by cost efforts underway at the company's Express segment. Sentiment is firming around FedEx's ability to produce profit improvement and coupled with accretion from the buyback and help from improving volumes, $10 of earnings power should enter the discussion for F15. Using its historical multiple of ~17x, we believe the upside case for FedEx shares is $170. As such, we are increasing our target to $170 and reiterate our Buy.
FedEx’s shares have dropped 1% to $138.26 today at 2:35 p.m., which means that the stock could have another 23% to go.
No comments:
Post a Comment