Stifel Downgrades FedEx (FDX) to Hold; Sees Lower Returns
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Stifel downgraded FedEx (NYSE: FDX) from Buy to Hold with a price target of $186.00, saying while e-commerrce growth will continue returns likely lower from here.
Analyst David Ross commented, "We upgraded the shares of FedEx Corp. a little over a year ago with the thesis that we would see one last run before either 1) settling into a global economic pullback, or 2) becoming immersed in a challenging TNT integration. From there, FDX didn't go straight up and its path has been a bit of a roller coaster. And while we do not see an imminent global recession—in fact, we believe there could be further market upside due to multiple expansion in the pre-Trump euphoria—FDX has hit our $186 target price, causing us to step to the sidelines rather than raise our estimates for the target multiple. For investors with a more bullish thesis, every P/E multiple point is worth >$12 in the share price, and we understand the rationale for a $200 target price. But in what we believe to be a still-fragile global economic environment with the heavy-lifting of the TNT integration ahead, we are choosing to take profits here and wait to re-enter at a later point. "
Shares of FedEx closed at $186.16 yesterday.
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