FedEx stock rose to trade at $143.17 as of 01:09 PM EDT.
FedEx Corporation’s (NYSE:FDX) financial estimates have been drastically reduced by Morgan Stanley to reflect what it refers to as the post-pandemic mean reversion/macro. The company anticipates that FDX profits will continue to be basically flat going forward as savings initiatives and simpler comparisons next year compete with forces such as additional unwind, cost inflation, and competition risk.
The FDX FY23 EPS forecast is now $12.70 instead of $20.30; the FY24 EPS estimate is $12.60 instead of $21.46, and the FY25 EPS estimate is $13.09 instead of $24.38. The price estimate for FDX is cut in half to $125 after using discounted cash-flow analysis, or around 11X normalized EPS of $11 to $12. The stock has been searching for a floor recently, so that level is called in line with those times. The risk-reward profile for FDX remains at Equal-weight, while positions and expectations have been slightly adjusted.
FedEx Stock Outlook
The mean reversion and macro slowing trends, according to Morgan Stanley, will directly affect UPS in the upcoming quarters. “We think it is extremely doubtful that UPS will be able to withstand these challenges given the parallels between the businesses in terms of clients, operations, and geographical areas.” In addition, greater investor expectations, union contract renegotiations in 2023, and AMZN insourcing are anticipated to pose enhanced idiosyncratic risks for UPS.
Shanker and company noticed that UPS is almost 35% higher than pre-pandemic levels, with FDX’s shares back at pre-pandemic levels. As a result, UPS has been assigned an underweight rating.
FedEx collaborates with customers to offer end-to-end supply chain sustainability through carbon-neutral shipping and sustainable packaging. We optimize package size and weight to decrease waste, boost shipping efficiency, and cut emissions. FedEx Express offers complimentary reusable, recyclable, and recycled packaging to help clients ship sustainably. FedEx packaging is 100% recyclable.
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