FedEx (FDX) Stock Gaining Today After Deutsche Bank Price Target Raise

NEW YORK (TheStreet) -- Shares of FedEx (FDX) - Get Report are up 2.11% to $176.98 in morning trading Monday after Deutsche Bank increased its price target to $210 from $209, while maintaining its "buy" rating.

"We believe FedEx is poised to deliver solid 2015 third quarter results on Wednesday morning given the tailwind from its profit improvement plan at Express, a strong 2014 holiday e-commerce season, and continued growth at Ground, its most profitable segment," analysts said.

Deutsche Bank said they see nearly 250 bps of margin expansion at Express in the third quarter, FedEx's largest segment, due largely to the continued execution of the company's $1.6 billion profit improvement plan, operating leverage to better aircraft load factors, and its yield initiatives. 

Analysts said that they believe continued congestion at the West Coast ports likely somewhat constrained margins in the third quarter, despite expected strong volumes and pricing improvement for the Ground segment. 

Analysts increased their earnings estimate to $1.88 from $1.85 per share for the third quarter because they believe better-than-expected volumes at Express and profit improvement plan tailwinds should offset the expected increased operating costs at Ground stemming from the West Coast post. 

FedEx provides a portfolio of transportation, e-commerce and business services under the FedEx brand.

Insight from TheStreet's Research Team: 

Top Stocks analyst Helene Meisler commented on FedEx in a recent post. Here is what she had to say about the stock:

The Transportation Index broke today. We can see that in the chart of FedEx (FDX), which we looked at last week; it broke that $172-$173 area. It is coming into some support around $169 now. I would not be surprised to see it bounce from there. But rallies back to $172 will probably fail.

- Helene Meisler, 'When Can We Expect a Bounce,' originally published on March 10, 2015 on Top Stocks.

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Separately, TheStreet Ratings team rates FEDEX CORP as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate FEDEX CORP (FDX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. We feel these strengths outweigh the fact that the company shows low profit margins." You can view the full analysis from the report here: FDX Ratings Report