Sterne Agee Reiterates Buy Rating on FedEx Corp. (FDX)

Sterne Agee is out with a research report this morning, where it reiterates its Buy rating on FedEx Corp. FDX; it has a $114.00 price target on the stock. The SA analysts cited the company's recent earnings results, which was below the consensus estimate. The disappointment was primarily due to higher than expected fuel costs above surcharge levels, continued high aircraft maintenance, larger labor cost accruals and a slower-than-expected Asian freight market. Despite the miss management raised the full year outlook. As for valuation, the analysts remarked, “Valuation on fiscal 2012 fundamentals is roughly $120, using a variety of methodologies, ranging from EV/Sales, to EV/EBITDA, to mid-cycle P/E on an absolute and relative basis. Valuation on peak cycle implies upside into the low $120s-130s.”