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Investing.com - Raymond (NSE:RYMD) James lowered its price target on FedEx (NYSE:FDX) to $260.00 from $275.00 on Monday while maintaining an Outperform rating on the stock.
The firm cited FedEx’s ongoing transition to Network 2.0, which aims to integrate the company’s Express and Ground offerings, as a key factor in the adjustment. Despite the lower target, Raymond James expressed confidence in FedEx’s DRIVE cost initiatives, which it believes will lead to stronger margins, earnings, and free cash flow in future years.
Raymond James highlighted management’s increased focus on cost reduction across various functional areas, enhanced capital allocation scrutiny, and a more shareholder-friendly capital return program featuring both buybacks and dividends as positive developments pointing to a more returns-oriented strategy.
The research firm also noted FedEx’s recently announced plan to spin off its Freight segment into a standalone company, describing it as a potential "value-unlocking event" that will place greater scrutiny on the operations of that business unit.
While adjusting the price target downward by $15, Raymond James maintained its Outperform rating, suggesting continued optimism about FedEx’s strategic direction despite near-term adjustments to valuation expectations.
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