FedEx’s (FDX) performance slightly exceeded consensus expectations in fiscal Q4, driven by less-than-truckload operations, Morgan Stanley said in an earnings review Wednesday.
Where FedEx Ground and Express missed consensus, Freight services surpassed both Morgan Stanley estimates and consensus expectations, the note said.
FedEx’s 2025 guidance might be slightly better, but the brokerage said, “As such, we do not believe that we received much new information today that will cause the [Wall Street] to materially gap up [fiscal 2025] earnings expectation.”
The proposed spinoff of LTL operations isn’t expected to fundamentally alter the risk-reward dynamics, Morgan Stanley said. “We believe the big stock reaction today is likely a result of the announcement of the strategic review of the LTL business driving short-covering of the stock.”
Morgan Stanley raised its price target for FedEx to $215 from $210 and reiterated equalweight rating.