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On Monday, FedEx Corporation (NYSE:FDX), a prominent player in the Air Freight & Logistics industry with a market capitalization of $53.7 billion, confirmed the upcoming appointment of John Smith as President and CEO of FedEx Freight, effective June 1, 2026. According to InvestingPro analysis, FedEx currently appears undervalued, making it an interesting watch for value investors. UBS analyst Thomas Wadewitz maintained a Buy rating and a $331.00 price target on the company’s stock, highlighting Smith’s extensive experience and successful leadership within the organization.
Smith, who is currently serving as the COO of Federal Express Corporation (FEC) US and Canada Surface Operations, has a notable history with FedEx. He previously held the position of CEO of the Freight division from 2018 to 2021 before becoming CEO of Ground for the period of 2021-2024. During his tenure, Smith oversaw significant improvements in the Freight division’s operating ratio (OR), which sharpened from 92.8% in fiscal year 2018 to 82.6% in fiscal year 2022. The company continues to demonstrate strong financial performance, with annual revenue of $87.8 billion and a healthy dividend yield of 2.44%.
Wadewitz pointed out that Smith’s appointment comes at a time when there was considerable investor speculation about whether FedEx would opt for an internal or external candidate for the role. His selection is seen as a strategic move, given his 25-year career at FedEx, with the majority of that time spent in leadership roles within its Freight business.
According to Wadewitz, Smith’s proven track record and deep understanding of the company’s operations are expected to be advantageous for FedEx Freight, especially as it transitions to operate as a standalone entity around June 2026. The analyst’s comments suggest confidence in Smith’s ability to steer the company successfully through its next phase of growth and operational development. With a P/E ratio of 14.01 and strong analyst consensus, FedEx shows promising potential. For deeper insights into FedEx’s valuation and growth prospects, including exclusive ProTips and comprehensive financial analysis, visit InvestingPro.
In other recent news, FedEx Corp. is navigating a series of significant developments that could impact its business trajectory. The company is preparing to spin off its less-than-truckload division, FedEx Freight, with new leadership appointments, including John A. Smith as the incoming president and CEO, and R. Brad Martin as chairman of the board. This strategic move is part of FedEx’s efforts to streamline operations and improve efficiency. Meanwhile, BMO Capital Markets has adjusted its outlook on FedEx by lowering the stock price target to $260 from $275, citing weaker-than-expected demand and macroeconomic uncertainties. Despite these challenges, BMO acknowledges FedEx’s cost-saving measures, which may position the company well for future demand recovery.
Additionally, Bernstein has maintained its Market Perform rating on FedEx with a price target of $282, following discussions about trade negotiations and tariff impacts during a recent investor webcast. FedEx is also addressing new trade regulations and their implications on air volumes and export activities. Separately, BofA Securities has slightly reduced its price target for FedEx to $270 while maintaining a Buy rating, highlighting the company’s structural cost transformation efforts. FedEx is focusing on optimizing capacity utilization amid international demand fluctuations, particularly in its business-to-business segment. These recent developments reflect FedEx’s ongoing adaptation to changing market conditions and regulatory landscapes.
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