FedEx (FDX) Outlook Falls Short of Bull Case - BMO Capital

BMO Capital analyst Fadi Chamoun reiterated a Market Perform rating and $315.00 price target on FedEx (NYSE: FDX) after Q4/F21 results outlook were largely better than anticipated but fell short of the bull case as it relates to controlling capex and delivering a path towards a stronger ROIC. With post-pandemic airfreight supply returning and a shift towards B2C and short haul deliveries in Ground, operating margins are in jeopardy.

The analyst stated "Management expects revenues to exceed $90b in F2022 on positive demand trends with pricing improvement momentum supporting margin expansion in each of the three operating segments. Management cautioned that labor cost inflation and the uneven timing for certain large contract renewals implies that F2022 growth will be more biased towards H2/22. Capex projected at $7.2b, above expectations in support of growing capacity."

For an analyst ratings summary and ratings history on FedEx click here. For more ratings news on FedEx click here.

Shares of FedEx closed at $303.69 yesterday.

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