Value Still in the Box

Doors are opening for FedEx $FDX ( ▲ 5.41% ).

Analysts at Wells Fargo $WFC ( ▲ 0.04% ) and Bernstein $EQH ( ▼ 4.43% ) both lifted the stock to Overweight, arguing investors are still underestimating FedEx’s earnings power. Wells Fargo raised its price target to $380, while Bernstein lifted its target to $427, implying upside of about 7% and 21%, respectively.

Both firms say the market has yet to fully price in improving fundamentals and structural changes underway at the company.

Bernstein analyst David Vernon said FedEx stands out as a cyclical name with multiple levers. Improving parcel fundamentals and the planned freight spin make the setup especially attractive, in his view.

Both firms flagged FedEx’s upcoming investor day on February 11-12 as a key catalyst. Wells Fargo’s Christian Wetherbee expects the company to outline a clearer path to higher profitability in its Express business, with multi-year targets that could reshape earnings expectations.

Bernstein also pointed to continued market share gains in small packages, plus unrecognized value in FedEx’s less-than-truckload freight business. Vernon said the current valuation fails to reflect the operating leverage embedded in that segment.

Internationally, Wells Fargo highlighted FedEx’s push to improve European profitability. Recent restructuring in France could unlock meaningful profit gains over time, adding another layer to the bull case.

Together, analysts see a company whose parts may be worth more than the whole.