In a report published by Oppenheimer, analyst Patrick Villani reiterated his Outperform rating and $124 price target on FedEx FDX.
Oppenheimer reported that, “Despite F3Q13 revenue increasing to $10.95B vs. our estimate/consensus of
$10.83B/$10.85B, F3Q13 adj'd EPS of $1.23 (-20% y/y) was below our estimate/
consensus of $1.35/$1.38. Adj'd operating margin of 5.8% was shy of our 6.4%
estimate primarily on accelerated demand mix toward lower yielding international
services in FedEx Express. Though this lent to near-term pain, we continue to
anticipate long-term gain, as FedEx Ground and FedEx Freight were solid and FedEx
Express will decrease US<=>Asia capacity by more effectively placing lower yielding
loads into lower cost networks. Incremental to FedEx's realignment plan targeting
improving annual profitability by $1.65B by FY16, we continue to anticipate 20%+
annual EPS growth in FY14-FY16. Reiterate Outperform/$124 target.”
Shares of FedEx closed at $99.13 on Wednesday.
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