FedEx Corp (NYSE: FDX) is already up 30% versus the start of the year but a Deutsche Bank analyst is convinced that the shipping giant is not yet done pleasing its shareholders.
FedEx stock could climb to $282
On Thursday, Amrit Mehrotra maintained his buy rating on the logistics company and raised his price target to $282 that suggests about a 25% upside from here.
The Memphis-headquartered firm is set to report its fourth-quarter financial results in June – that the analyst expects will be a meaningful catalyst for the FedEx stock.
We see little to no risk on the quarter itself, and we are very positive on the potential for 2024 earnings and guidance relative to consensus.
Consensus is for the multinational conglomerate to earn $4.78 a share this quarter versus $6.87 per share a year ago.
FedEx is committed to cutting costs
Mehrotra expects FedEx Corp to guide for $20.15 in earnings on a per-share basis for its fiscal 2024 – 11% higher than the Street estimates.
The Deutsche analyst sees it likely that the company will target cutting near $2.0 billion of costs next year – close to half of its $4.0 billion target – which could also boost the FedEx stock price. His research note reads:
We estimate this would translate to $1-$2 of additional upside to our fiscal 2024 EPS estimate (implying EPS of over $21 per share, which would be 19% above current consensus).
In April, FedEx Corp raised its dividend by 10% (read more) that makes up for another reason to own this stock.
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