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MEMPHIS, Tenn. - FedEx Corp. (NYSE: FDX), a prominent player in the Air Freight & Logistics industry with a market capitalization of $54.16 billion, is steering its less-than-truckload (LTL) freight division, FedEx Freight, toward independence with the announcement of key leadership appointments. John A. Smith, currently the chief operating officer for U.S. and Canada at Federal Express, is set to take the helm as president and CEO of FedEx Freight. R. Brad Martin, who serves as vice chairman of the FedEx Corp. board, will assume the role of chairman of the board for FedEx Freight upon the division’s spin-off, expected by June 2026.
The strategic move aligns with FedEx’s ongoing efforts to streamline its operations. Smith brings extensive industry experience, including a 25-year tenure with FedEx Freight and its predecessors. From 2018 to 2021, he led the business through significant revenue and operating income growth, as well as through the logistical challenges posed by the pandemic.
Martin, who chairs the FedEx Corp. Audit and Finance Committee, has played a pivotal role in the strategic analysis leading to the decision to separate FedEx Freight. He is anticipated to maintain his position on the FedEx Corp. board while chairing the board of the newly independent entity.
FedEx has previously appointed Tom Connolly as vice president of LTL Sales to spearhead the expansion of FedEx Freight’s dedicated LTL salesforce, leveraging his three decades of industry experience.
The company, with an annual revenue of $87.81 billion and a healthy gross profit margin of 27.18%, remains focused on providing a broad portfolio of transportation, e-commerce, and business services across its global network. According to InvestingPro analysis, FedEx currently appears undervalued based on its Fair Value metrics, with analysts setting a consensus high target of $354 per share. The company has maintained dividend payments for 24 consecutive years and has raised its dividend for 4 consecutive years, demonstrating strong financial stability. FedEx is also committed to achieving carbon-neutral operations by 2040, underscoring its dedication to responsible and resourceful global connectivity.
This leadership transition is a part of the planned spin-off process, which FedEx Corp. has been actively preparing for. The separation is subject to various conditions, including regulatory approvals, and there can be no assurance that the transaction will occur within the anticipated timeframe, or at all. For deeper insights into FedEx’s financial health and future prospects, including additional ProTips and comprehensive analysis, visit InvestingPro, where you’ll find detailed Pro Research Reports covering what really matters for informed investment decisions.
Investors and stakeholders are keeping a close eye on these developments, which represent a significant shift in FedEx’s business structure. The information is based on a press release statement from FedEx Corp.
In other recent news, FedEx has seen a series of adjustments and analyses from various financial firms. BMO Capital Markets has reduced its price target for FedEx to $260 from $275, citing ongoing challenges in the business-to-business freight market and broader economic uncertainties. They have also lowered their earnings per share estimates for the fourth quarter of fiscal year 2025 by 5% and for fiscal year 2026 by 7%, while maintaining a Market Perform rating. Bernstein analysts have maintained their Market Perform rating with a price target of $282, following discussions on trade negotiations and investor sentiment during a recent webcast with FedEx executives.
BofA Securities has slightly adjusted FedEx’s price target to $270 from $272 but continues to hold a Buy rating. This adjustment comes after discussions at the BofA Industrials, Transportation & Airlines Key Leaders conference, where FedEx’s ongoing cost transformation efforts were highlighted. Meanwhile, JPMorgan has lowered its price target for FedEx to $280 from $323, maintaining an Overweight rating despite expectations that FedEx may underperform compared to its industry peers. This follows FedEx’s modest miss in its third-quarter fiscal year 2025 consensus and a significant reduction in fiscal year 2026 guidance.
FedEx’s recent performance and strategic initiatives, such as Network 2.0 and DRIVE, are being closely monitored as the company navigates a challenging economic landscape. The company’s focus on optimizing capacity utilization is a response to fluctuating international demand and evolving market conditions. Investors and market observers are watching FedEx’s strategic responses and performance closely as it deals with these economic headwinds.
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