FedEx Downgraded to "Market-Perform"

Summary: Bernstein analysts have downgraded FedEx to "Market-Perform," citing risks related to execution, events, and policy. Price target lowered to $316 from $337.

Key Points

• Analyst Downgrade: FedEx's rating was reduced due to execution, event, and policy risks.
• Price Target: Adjusted from $337 to $316.
• Earnings Uncertainty: Concerns over upcoming second-quarter earnings and Less-Than-Truckload (LTL) freight spinoff decisions.

According to Bernstein, the integration of FedEx’s Express and Ground networks continues to present significant challenges, particularly in larger markets. Uncertainty regarding the potential Freight business spin adds to market concerns. Potential policy risks tied to global trade under the Trump administration may further impact FedEx’s performance. Long-term value is still recognized, but near-term challenges require significant earnings improvement to meet revised expectations.