Shares of FedEx Corp. (FDX) gained 0.4% in morning trading, to buck the steep slide in the broader stock market, after BofA Securities analyst Ken Hoexter turned bullish on the package delivery giant, citing the positives associated with Amazon.com Inc.'s (AMZN) decision last week to pause its competing third-party delivery business ( ). Hoexter raised his rating to buy from neutral, and boosted his stock price target by 20%, to $140 from $117. He said Amazon's pausing its Amazon Shipping business "highlights the difficulty" to efficiently enter the business. "We also highlight the integration of FedEx's Express and Ground networks ( ) for select e-commerce deliveries, which should reduce network costs, its deployment of dynamic routing software at Ground, the conversion of SmartPost packages into Ground, and the shutdown of belly space, which is aiding airfreight rates," Hoexter wrote in a note to clients. He noted, however, that only about 20% of FedEx revenue comes from business-to-consumer deliveries, while the impacts from the COVID-19 pandemic on its business-to-business business are "significant." FedEx's stock has lost 22.9% over the past three months, while the Dow Jones Transportation Average has dropped 27.2% and the Dow Jones Industrial Average has declined 19.6%.
-Tomi Kilgore; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
April 13, 2020 11:27 ET (15:27 GMT)
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