FedEx Shares Likely to Trade in a Range Around $150

By Sam Boughedda

Citi analysts told clients in a research memo Wednesday that FedEx (NYSE:) shares are likely to trade in a near-term range at around $150.

The analysts, who maintained a Neutral rating and $165 per share price target on the stock, explained that ahead of FedEx’s CEO and CFO meeting with investors, the company launched its accelerated share repurchase (ASR) program, “pulling all of its previously stated $1.5b of repurchases into F2Q (vs. $1.0b previously).”

“We also had the opportunity to catch up with the company ahead of their meetings,” they said. “Through the first month of F2Q, business appears to be trending in line with the revised guidance.”

Citi believes FedEx management’s willingness to interact directly with investors is a positive change but remains concerned that F23 cost-savings measures will be only partly effective, ahead of potentially larger progress in F24 and F25.

“With that backdrop, we still see some earnings risk to F23, which means shares are more a call on broader macro trends near-term. This means we maintain our Neutral rating, with shares likely to trade in a near-term range around ~$150,” the analysts concluded.