FedEx Stock Dips After Bernstein Downgrade, But JPMorgan Price Target Hike Lifts Retail Optimism

Shares of logistics major FedEx Corp slid nearly 4% on Tuesday after Bernstein reportedly downgraded the stock to ‘Market Perform’ from ‘Outperform’ and lowered its price target to $316 from $337, ahead of the company’s second-quarter (Q2) earnings report.

Although Bernstein sees value in the stock, the brokerage believes adding at these levels ahead of increasing execution, event, and policy risk appears challenging to defend, it reportedly stated.

Bernstein is taking a "tactical pause" and is downgrading the shares ahead of a "widely expected reset" in the near-term guidance framework. The development comes ahead of FedEx’s anticipated spin-off of its freight division.

However, Barclays appears to have a different take. The firm’s analyst Brandon Oglenski recently said that a decision to spin off the company’s freight business could unlock $10 billion-$20 billion of incremental equity value for shareholders, according to a report.

The firm has an ‘Overweight’ rating on the stock with a $365 price target.

Meanwhile, JPMorgan reportedly raised FedEx’s price target to $366 from $350 while keeping an ‘Overweight’ rating on the shares. The brokerage expects a high probability that the company’s freight segment will be spun off into a separate company, and management reiterates the fiscal 2025 earnings outlook.

In June, FedEx said that it had turned its focus to the next phase of its long-term stockholder value-creation plans. Its management and board of directors are assessing the role of FedEx Freight in the company’s portfolio structure and potential steps to unlock sustainable shareholder value further.

“The company is committed to completing this review thoroughly and deliberately by the end of the calendar year,” it had said in a statement.

Despite the dip in stock price, retail sentiment on Stocktwits hit a one-year high and flipped into the ‘extremely bullish’ territory (92/100). The move was accompanied by ‘extremely high’ retail chatter.

FDX’s Sentiment Meter and Message Volume as of 1:12 p.m. ET on Dec. 3, 2024 | Source: Stocktwits

FedEx is scheduled to report its second-quarter earnings on Dec. 19 after the closing bell.

One Stocktwits user believes the current dip provides a good buying opportunity ahead of earnings.

FedEx shares have gained over 13% since the beginning of the year.

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