FedEx stock price forecast: Citi sees another 20% upside
- Citi and Bank of America analysts upgraded FedEx to buy on Thursday.
- FedEx Corp says it will lay off 10% of its officers and directors to cut costs.
- FedEx stock is already up roughly 15% versus the start of the year 2023.
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Shares of FedEx Corp (NYSE: FDX) are trading up this morning after a Citi analyst turned bullish on the multinational package delivery company.
FedEx is cutting jobs to minimise costs
Christian Wetherbee has had a change of heart just a day after FedEx Corp said it will lay off over 10% of its officers and directors to cut costs amidst softening demand. His research note reads:
Wednesday’s announcement of officer/director headcount reductions is incremental and likely sets F24 off to a good start for incremental cost momentum.
He said “incremental” because the Memphis-headquartered firm, a little over a month ago, had already announced plans of parking planes and closing offices to lower costs by $1.0 billion this year as Invezz reported HERE.
Versus the start of the year, FedEx stock is up roughly 15% at writing.
FedEx stock could climb further to $240
On Thursday, Wetherbee recommended that investors buy FedEx stock at the current price as it could climb further to $240 a share. If true, that would mean about a 20% return over the next twelve months.
With some progress on cost cutting and a major reset of expectations, we think the upside case if very straight forward.
He now sees negativity as largely priced in. Wetherbee’s view is in line with Bank of America’s Ken Hoexter who also upgraded the transportation company to “buy” today.
Hoexter expects the announced layoff to result in $60 million of savings this year. More importantly, he said the headcount reduction could boost its quarterly per-share earnings by 40 cents.