Morgan Stanley Reiterates Overweight on FedEx

Morgan Stanley is out with its report today on FedEx FDX, reiterating Overweight. In a note to clients, Morgan Stanley writes, "We believe the share price will rise in absolute terms over the next 60 days. This is because the stock has traded off recently, making short term valuation much more compelling. Investors are worried that macro headwinds will cause FDX to issue FY12 guidance below sell-side consensus estimates when it reports earnings on June 22. However, historical seasonality alone implies guidance is likely to meet sell-side expectations. Moreover, given that (1) F4Q11 was impacted by a number of non-recurring items FedEx will likely adjust for in guidance and (2) we believe pricing is likely to improve going forward, we see upside to simple, historical seasonality. As such, we reiterate our OW rating." Shares of FDX closed Thursday at $86.21, up 0.72% from Wednesday's close.