FedEx stock, FDX stock, shipping stocks

Citigroup and Bank of America upgraded FedEx stock to “buy”

Citigroup and Bank of America upgraded FedEx Corporation (NYSE:FDX), one session after the company announced plans to cut 10% of its officers and directors. 

Citigroup upped its rating on the shipping giant to “buy” from “neutral” and hiked its target price to $240, saying it sees “increasing signs of cost control following its missteps in 2022.” Bank of America, meanwhile, upgraded FDX to “buy” from “neutral.”

More upgrades could be just around the bend, considering 15 of the 31 analysts covering FedEx stock sport a “hold” rating. The equity’s consensus 12-month price target of $197 is a slim 5.4% discount to last night’s close — signaling there’s some wiggle room for more price target adjustments.

Options traders are also pessimistic towards the stock. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), FDX sports 10- and 50-day put/call volume ratios that rank in the 96th and 82nd percentiles, respectively, relative to the past year.

The good news for options traders is that premium is affordable. FedEx stock’s Schaeffer’s Volatility Index (SVI) of 29% sits in the 13th percentile of its annual range. This means option traders are pricing in relatively low volatility expectations at the moment.

Ahead of the open, FDX was last seen 3% higher to trade at $208.25, set to open above the $205 level for the first time since mid-September. The shares are kicking off 2023 on the right foot, coming into the session with a 16.7% year-to-date lead. However, in the last 12 months, FedEx stock is nearly 20% lower. 


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By admin