On Wednesday, Stifel, a financial services firm, adjusted its outlook on FedEx Corporation (NYSE:FDX), reducing the stock price target to $290 from the previous $305 while retaining a Buy rating on the stock. The adjustment comes as FedEx prepares to announce its third-quarter earnings for fiscal year 2024 after the market closes on Thursday, March 21st, followed by a conference call scheduled at 5:30 pm EDT.
The firm expressed a more cautious stance ahead of the earnings report, citing "some episodic factors, as well as longer-term competitive factors" as reasons for a revision of near-term estimates for the company.
Despite the reduction in the near-term outlook, Stifel highlighted the significant potential for FedEx to enhance margins and return on capital through strategic initiatives such as the DRIVE cost takeout program and Network 2.0.
Stifel underscored the importance of execution for FedEx, noting that while there are positive early indications of success from these initiatives, investors will require "clear signs and quantitative markers of change versus just lip service." The firm emphasized that tangible evidence of progress in these areas will be critical for the stock's value appreciation.
Following the earnings release and conference call, Stifel plans to publish additional commentary and an updated model. This forthcoming analysis will likely provide investors with further insights into the company's performance and the potential impact of the DRIVE and Network 2.0 initiatives on FedEx's financials.
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