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Can Apple's iPhone Rescue FedEx Investors?

MEMPHIS -- ( TheStreet) -- Is Apple's (AAPL - Get Report) iPhone5 coming to the rescue of FedEx (FDX - Get Report) investors?

S&P Capital IQ analyst Jim Corridore reiterated a strong buy on FedEx shares on Tuesday and said stronger-than-expected demand for the new devices, leading to supply shortages, could benefit near-term FDX revenue.

"FedEx is one of the big facilitators of bringing iPhones from Asia," Corridore said, in an interview. "Certainly with the shortages, the need for express transportation will be even more urgent. New technology introductions don't come all the time, so this is a catalyst for the near-term."

FedEx shares have fallen about 5% since their opening on Sept. 17, the day before the shipper reported disappointing earnings for the fiscal first quarter, which ended Aug. 31.

"Earnings for the first quarter were below our expectations as weak global economic conditions dampened revenue growth, drove a shift by our customers to our deferred services and outpaced our near-term ability to reduce FedEx Express operating costs to match demand levels," said Chief Financial Officer Alan Graf, in the earnings release. FDX also reduced full-year guidance to between $6.20 and $6.50 a share.

In his Tuesday report, Corridore reiterated his full-year guidance of $6.50 a share and his target price of $122, 19 times his full-year estimate. He also raised his fiscal year 2014 estimate to $8.02 a share citing "improved demand next year."

"FDX is expected to unveil a new cost savings program at its investors meeting on October 9 and 10," Corridore wrote. "We think it should be able to improve operating margins with cost cuts and more efficient use of assets."

In late morning trading Tuesday, FedEx shares were up 25 cents to $85.41. The shares started the year at $85.47.

-- Written by Ted Reed in Charlotte, N.C.

>To contact the writer of this article, click here: Ted Reed

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