Before the opening bell on Friday, Credit Suisse raised its rating on FedEx (FDX). Here’s what the upgrade means for mutual fund investors.
Inside the Analyst Move
Credit Suisse raised its price target on FedEx from $177 to $203, suggesting a 14% upside from the stock’s current price. The firm also boosted its rating from “Neutral” to “Outperform.”
Analyst Allison Landry commented: “We think that FDX is more adept at managing the rapid growth in eCommerce and the evolving peak season landscape, and is doing so more profitably. The HOLT Economic P/E multiple gap between UPS and FDX is close to a recent historical high, suggesting there is scope for multiple expansion at FDX.”
FedEx Has Outperformed Its Peers, and Growth Is Expected to Continue
In the last 12 months, FedEx has outperformed the S&P 500 Index, the transportation industry and its biggest competitor UPS (UPS). This growth is expected to continue due to strong demand and lower oil prices.
The company has done a great job growing earnings, but has failed to offer an attractive dividend yield to investors.
Mutual Funds to Watch
Investors interested in FDX may be interested in the funds listed below. These funds currently have the largest stakes in the company.
| Symbol | Mutual Fund | Stake |
|---|---|---|
| VPMCX | Vanguard PRIMECAP | 3.46% |
| DODGX | Dodge & Cox Stock | 3.11% |
| VTSMX | Vanguard Total Stock Market Index | 1.64% |
The Bottom Line
The funds listed above offer investors a stake in FDX, while remaining diversified. Investors interested in FDX may also be interested in UPS (UPS).