Wunderlich Securities Begins Coverage of FedEx

By Andy Meek

Wunderlich Securities Inc. has added FedEx Corp. to its stock coverage universe, initiating coverage of the package shipping giant with a “buy” rating and a $120 price target.

According to Wunderlich, FedEx is well-positioned to benefit from long-term trends like increased global sourcing and selling, more sophisticated supply chain management and growth in e-commerce.

“While slow global growth, yield pressure from overcapacity, and international services trade-down remain near-term headwinds, we expect internal initiatives will drive substantial margin improvement and (earnings per share) leverage at (FedEx) Express and Freight over the next two to three years,” Wunderlich writes in the firm’s first comments about the company. “(FedEx) has a successful history of flexing its portfolio of networks to meet market conditions. We are confident that management’s strategic plan will result in reaching its goals.”