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$FDX (FedEx)
| 08/10/2020
Wall Street Research: Alerts & Summaries
Monday, 8/10/2020 – Both FedEx and UPS have extended their Aug. 7th rally with $FDX leading the way today with a +6% gain aided in part by a big upgrade by respected independent broker Sanford C. Bernstein & Co. Hammerstone’s team reported the upgrade ASAP and quickly followed it up with a brief recap of the note well before the stock moved to its current level.
HsMkt (7:07:35 am): $FDX FedEx raised to outperform at Bernstein; PT $225
HsMkt (7:12:31 am): $FDX – The global recovery absolutely, positively needs FDX – upgraded to Outperform, TP $225 @ Bernstein – We upgraded FDX to Outperform as we expect the company to deliver better than consensus expectations on 1) better residential pricing, 2) continued strength in Express and air cargo rates, 3) an inflection in ground margins.
E-commerce parcel pricing is expected to remain strong as the pull forward of e-commerce penetration has strained delivery capacity. With UPS looking to get “better, not bigger,” FDX emphasizing returns, and the USPS curtailing capacity the rate environment at present is outstanding. Pricing is the key to getting better returns out of residential delivery, and once the carriers begin to take price / improve margins we expect the market to move beyond the “e-commerce driven negative margin mix shift” narrative that has plagued the sector. $FDX @ Bernstein
HsMkt (9:32:09 am): $FDX +3.2%; Bernstein upgraded earlier
HsMkt (10:32:47 am): $IYT Dow Transports outperform – up more than 2% for a second straight day and overall up a 9th straight day, behind airlines strength ($AAL, $UAL, $ALK) and continued momentum in package delivery names ($UPS, $FDX).
