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Wall Street is getting more bullish on the prospects for
stock. The stock picked up an analyst upgrade Monday evening.
KeyBanc analyst Todd Fowler upgraded FedEx (ticker: FDX) stock to Buy from Hold and established a new $350 price target for shares of the logistics giant. FedEx stock is up about 1% in early trading Tuesday. The
and the
for comparison, is flat.
FedEx stock had an epic 2020, rising more than 70%. Covid-19 changed a lot, including online-shopping trends. The boom in e-commerce, along with higher air freight rates, produced a 20% rise in calendar 2020 earnings while many other businesses struggled to stay open.
But shares have stalled out over the past six months. FedEx stock has eked out a gain of about 6% since mid-October, about 10 percentage points below the rise of the S&P 500. Investors have started to look at reopening plays and FedEx stock is being lumped into stocks that worked while the economy was closed.
FedEx is still a reopening play though. Fowler points out in his report that business-to-consumer volumes are still strong, air freight pricing is resilient and global economic activity is picking up.
“We expect these trends to more than offset any potential impact from a return to in-person shopping/service spending,” wrote the analyst in his report.
Fowler isn’t the only one feeling better about FedEx lately. J.P. Morgan analyst Brian Ossenbeck put FedEx shares on his “focus list” this past week. What’s more, Baird analyst Garrett Holland calls FedEx stock a top pick for 2020. Holland took over for longtime transport analyst Ben Hartford in January. He launched coverage of FedEx stock with a Buy rating with a $312 price target.
With Fowler’s upgrade, almost 75% of analysts covering the stock rate it at Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 55%.
Wall Street still believes FedEx stock can work higher in 2021.
Write to Al Root at allen.root@dowjones.com
