BofA says FedEx shares are a top pick for 2026

Investing.com -- Bank of America upgraded FedEx to Buy in a note to clients on Friday, arguing the company is positioned to benefit from cost reductions, network consolidation and a potential recovery from a nearly four-year freight downturn.

The upgrade is part of a broader shift in the bank’s transport strategy for this year, with analyst Ken Hoexter saying BofA is “expanding exposure to cyclical Transport stocks into 2026.”

Hoexter wrote that the setup is supported by “the removal of capacity in the truckload sector” and the possible end of the elongated 2022-2025 freight recession.

He added that demand should improve as lower interest rates, infrastructure spending and investment in data centers and power supply feed through the economy.

BofA raised FedEx to Buy from Neutral and lifted its price target to $365 from $315, calling FDX one of its “top picks for 2026.”

Hoexter cited “idiosyncratic momentum” tied to the company’s integration and cost-cutting strategy, share gains and yield discipline. The firm expects material earnings upside as FedEx executes its $1 billion Network 2.0 savings plan in the second half of fiscal 2026.

The bank also pointed to the June 2026 spin-off of FedEx Freight as a key catalyst. Hoexter said the division’s separation, combined with potential benefits if the freight recession ends in 2H26, strengthens the investment case.

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