JPMorgan's analyst Brian Ossenbeck noted that the structural improvements at FedEx, particularly through its Network 2.0 initiative, are becoming increasingly evident. The investment bank raised its price target for FedEx shares to $460 from $432, indicating a potential 15% upside from the stock's recent close.
The planned spin-off of FedEx Freight into an independent company is expected to enhance FedEx's free cash flow and support its long-term targets for 2029. Ossenbeck mentioned that while interest from long-only investors has plateaued, it is likely to improve once the financial details of both FedEx and its Freight unit become clearer post-spin.
The sentiment around FedEx has been improving, with hedge funds showing a preference for the stock as the company continues to execute its transformation initiatives. Currently, 17 out of 29 analysts covering FedEx have a buy or strong buy rating, reflecting a positive outlook as shares have increased by 38% since the start of the year