On Friday, FedEx Corporation (NYSE: NYSE:FDX) saw its price target slightly increased by a Bernstein SocGen Group analyst from $316.00 to $320.00, while the company's stock rating remained at Market Perform. The adjustment came after FedEx reported its second-quarter earnings for fiscal year 2025, posting an earnings per share (EPS) of $4.05, which was a modest exceedance of both street and Bernstein's expectations.
In the report, FedEx management announced a reduction in the guidance for the fiscal year 2025, factoring in an expanded restructuring budget. Additionally, the company confirmed its strategy to spin off its less-than-truckload (LTL) freight business within the next 18 months. While the Express segment showed stronger performance, concerns were raised about the Freight segment's weaker outlook and the potential additional costs associated with the separation of the LTL freight business.
The analyst noted these developments as factors influencing the decision to maintain the Market Perform rating. Despite the complexities introduced by the Freight segment's performance and the impending separation costs, the analyst's near-term plus one (NTM+1) estimates for FedEx have been modestly raised.
The new price target of $320.00 reflects a forward earnings estimate multiple of 12.8 times, which represents a slight increase from the previous target. The report indicates that while the analyst sees positive developments in the Express segment, the overall picture for FedEx is mixed due to the challenges facing the Freight segment and the costs associated with the upcoming business spinoff.
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