Our 12-month target price remains $261, a 12x multiple of projected FY 25 (May) EPS, in line with FDX’s historical forward average. We keep our FY 24 EPS estimate at $17.78 and FY 25’s at $21.72. Our upgrade is on valuation, with shares down almost 10% since reporting FQ3 earnings in late March 2024. We think a broader macroeconomic recovery is not yet in the making, as U.S. Manufacturing PMI data continues to wobble with the April reading of 49.2, which is a downtick from March’s 50.3. In the meantime, we think FDX (like many in the Air Freight & Logistics space) is focusing on cost controls to boost margins. Shares yield 2.0%; based on our FY 25 EPS estimate, we calculate a dividend payout ratio of 23%, which we see as very manageable. We think the key inflection point to watch will be volume growth in Express, which has been elusive of late. Express volumes were down in the February 2024 quarter.