FedEx (FDX) Stock Price Target Lowered at Barclays
NEW YORK (TheStreet) -- Barclays lowered its price target on FedEx (FDX) - Get Report stock to $175 from $180 on Monday. The firm maintained its "equal weight" rating on the stock.
It will take time for the Memphis-based delivery company to improve the profitability of TNTExpress, a European delivery company that FedEx bought earlier this year, Barclays said.
"We like FedEx's recently improved profitability in the legacy Express segment and management's aggressive guidance for nearly 20% growth in fiscal year 2016," Barclays said. "But lower global economic expansion, risk of negative operating leverage and a likely longer time horizon to make TNT accretive keeps us at an Equal Weight position in FedEx shares."
FedEx competitor UPS (UPS) reported negative U.S. ground volume for the first time since 2011, which highlights the challenges in the package market, the firm added.
Shares of FedEx were up 1.06% to $157.64 on Monday morning.
Separately, TheStreet Ratings team rates FEDEX CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
We rate FEDEX CORP (FDX) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, good cash flow from operations, growth in earnings per share and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- FDX's revenue growth has slightly outpaced the industry average of 1.6%. Since the same quarter one year prior, revenues slightly increased by 5.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Air Freight & Logistics industry average. The net income increased by 6.0% when compared to the same quarter one year prior, going from $653.00 million to $692.00 million.
- Net operating cash flow has increased to $1,241.00 million or 26.37% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 1.30%.
- Despite currently having a low debt-to-equity ratio of 0.47, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Despite the fact that FDX's debt-to-equity ratio is mixed in its results, the company's quick ratio of 1.57 is high and demonstrates strong liquidity.
- FEDEX CORP has improved earnings per share by 7.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, FEDEX CORP reported lower earnings of $3.58 versus $6.79 in the prior year. This year, the market expects an improvement in earnings ($10.67 versus $3.58).
- You can view the full analysis from the report here: FDX