On Friday, Jefferies, a global investment banking firm, adjusted its price target for FedEx (NYSE:FDX), increasing it from $265.00 to $300.00 while retaining a Hold rating on the stock.
This adjustment follows the release of FedEx's financial results for the third quarter of fiscal year 2024, which showed adjusted operating profit and adjusted earnings per share surpassing expectations by 10% and 12%, respectively.
The improved financial performance was attributed in part to the Express segment, where the operating margin reached 2.5%, significantly higher than the estimated 1%. The margin improvement, which was up 130 basis points year-over-year, was largely due to a reduction in fuel costs as a percentage of revenue by 150 basis points.
Despite this, the company experienced softer-than-expected volumes in its Ground segment, and the Freight margin fell short of estimates by 200 basis points.
FedEx has confirmed its earnings per share outlook for the full fiscal year 2024, projecting $17.75 at the midpoint. Following the announcement of the quarterly results, FedEx's shares were trading at 14 times the projected earnings per share for fiscal year 2025 in after-hours trading.
The report by Jefferies reflects the latest financial achievements of FedEx, particularly within its Express segment, and provides investors with updated expectations for the company's stock performance.
The reaffirmation of the earnings outlook by FedEx indicates a steady course for the company's financial future.
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