In this article, we discuss the 5 stocks receiving price-target cut from analysts. If you want to see more such stocks on the list, go directly to Wall Street Analysts Just Trimmed Price Targets for These 10 Stocks.
05. FedEx Corporation (NYSE:FDX)
Price Reaction after the Price Target Cut: -4.84 (-1.73%)
On April 2, BofA Securities analyst Ken Hoexter revised down the price target for FedEx Corporation (NYSE:FDX) from $346.00 to $340.00, despite retaining a Buy rating for the company. FedEx Corporation (NYSE:FDX) operates in the logistics and delivery services sector, facilitating global shipping and transportation solutions. FedEx exceeded expectations in the third quarter, with an adjusted EPS increase of 13% year-over-year, surpassing both the target set by Bank of America Securities and the consensus estimate. The company remains on course with its cost-saving initiatives, particularly the DRIVE program, which is anticipated to deliver $1.8 billion in savings in fiscal 2024, with an additional $4.2 billion planned for subsequent years. These savings are forecasted to significantly bolster FedEx Corporation (NYSE:FDX) EPS, indicating strong potential for profitability growth. Moreover, further supporting the Buy rating, FedEx has demonstrated effective cost management strategies, including notable reductions in incentive compensation, which contributed to the earnings beat for the quarter. Despite the short-term negative market response, the Buy rating by Ken Hoexter implies confidence in FedEx Corporation (NYSE:FDX) long-term growth potential.
Artisan Value Fund stated the following regarding FedEx Corporation (NYSE:FDX) in its fourth quarter 2023 investor letter:
“Other Q4 laggards were global reinsurer Arch Capital and shipping company FedEx Corporation (NYSE:FDX)—holdings that pulled back following large gains. Back in September 2022, FedEx was selling for less than 8X our estimate of normalized earnings due to substantial pessimism. Although the demand environment remains challenging globally, particularly in the Express segment, the company is delivering solid earnings growth driven by cost savings initiatives. FedEx’s DRIVE program, which seeks to deliver $4 billion in permanent cost reductions by creating an integrated air-ground network similar to that of rival UPS, is showing progress, and workforce reductions have also been enacted. While operating results can be choppy, FedEx’s longer term business economics are highly favorable given the global shipping industry’s consolidated structure and massive barriers to entry that afford operators with pricing power to counter cost inflation and earn respectable returns on capital over the business cycle.”
