Activist pressure will lift FedEx higher

Article Excerpt

FedEx’s shares hit a new all-time high of $320 in 2021 as the COVID-19 pandemic continued to prompt consumers to buy more goods online. The stock has moved lower as physical stores re-opened and rising fuel and other costs hurt its earnings. However, a new deal with an activist investor should spur the stock higher in the next few years. FEDEX CORP. $226 is a buy. The company (New York symbol FDX; Aggressive Growth Portfolio, Consumer sector; Shares outstanding: 259.8 million; Market cap: $58.7 billion; Price-to-sales ratio: 0.6; Divd. yield: 2.0%; TSINetwork Rating: Average; www.fedex.com) delivers packages and documents in the U.S. and 220 other countries. The company’s express division (mainly air freight) supplies 50% of its revenue, followed by ground deliveries (36%), less-than-truckload shipping (10%) and other services (4%). In May 2016, FedEx paid $4.9 billion for TNT Express NV, a Netherlands-based courier that operates throughout Europe. The company has now largely integrated those new operations. That purchase helped push up FedEx’s revenue by 5.8%, from…