JPMorgan Downgrades FedEx (FDX) to Neutral

JPMorgan analyst Brian Ossenbeck downgraded FedEx (NYSE: FDX) from Overweight to Neutral with a price target of $274.00 (from $284.00).

The analyst comments: "We are downgrading FedEx based on our recent channel checks across a wide range of contacts in the LTL industry merit a lower multiple in our SoTP analysis for the Freight segment. In addition, we are increasingly concerned the full year EPS guide is at risk given it already embeds a rebound in Freight fundamentals. The high cost of separating the Freight segment and the recent operational underperformance will also likely weigh on the LTL multiple post-spin. Separately, our discussions across the parcel industry confirm shippers are increasingly pushing back on higher rates while competitors add capacity to the market on a regular basis. Our target valuation still reflects a 1x premium to the stocks' historical average on a P/E basis although we do not expect FDX will re-rate higher until Federal Express can address some of its structural issues such as profitability in Europe and negative mix in the U.S."

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 $242.33 yesterday.

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