FedEx’s stock valuation is currently facing mixed reviews as analysts adjust their ratings in light of the planned spin-off of its freight division. Rothschild Redburn has downgraded its rating for FedEx from Buy to Neutral, setting a new target price of $317. This decision comes after a significant three-month rally in FedEx shares, which have appreciated approximately 37% and are nearing their 52-week peak.
Analyst Ratings and Price Targets
Several firms have updated their price targets for FedEx, reflecting varying outlooks on the stock:
- Rothschild Redburn: Downgraded to Neutral, target raised to $317 from $271.
- Argus: Increased target to $350 from $250, maintaining a Buy rating.
- Wolfe Research: Raised its target to $355 from $347 while keeping an Outperform rating.
The consensus among analysts remains cautiously optimistic. Currently, 22 analysts are covering FedEx, with 8 expressing bullish sentiment and 10 remaining neutral.
FedEx Freight Spin-off Details
FedEx is on track to finalize the spin-off of its freight division by June 1, 2026. The new entity will trade on the New York Stock Exchange under the ticker FDXF. CEO Raj Subramaniam has highlighted the significance of this move, describing it as a step towards creating “two world-class companies.”
According to estimates, FedEx Freight is projected to generate $8.9 billion in revenue and $1.3 billion in operating income for fiscal 2025.
Stock Performance and Future Outlook
As of the latest reporting, FedEx shares closed at $306.95, approximately 3.7% below their 52-week peak of $318.83. The overall message regarding the stock is mixed.
MarketBeat notes that the consensus rating remains at Hold, with an average price target set at $303.03. However, concerns over a potential downturn in the freight segment or a cooling shipping cycle could pose challenges to FedEx’s valuation moving forward.
In conclusion, FedEx’s stock is experiencing turbulence as analysts weigh the implications of the freight division spin-off against the backdrop of recent stock performance. Investors should remain attentive to further developments as the anticipated separation approaches.
