Should I buy FedEx shares after a positive view from J.P Morgan?

FedEx Corporation (NYSE: FDX) shares have advanced more than 10% since the beginning of December 2021, and the current price stands at $258.

J.P Morgan expects significant upside potential for the transportation and logistics sector, and according to J.P Morgan, FedEx represents a top pick.

J.P Morgan expects significant upside potential

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FedEx’s business has proven improvements throughout the second fiscal quarter, and the company reported strong earnings results this month.

Total revenue has increased by 14.1% Y/Y to $23.5 billion, while the GAAP earnings per share were $3.88.

Operating income rose 33% Y/Y during the quarter, and the company expects earnings per share to be between $18.25 to $19.25 for the 2022 fiscal year.

FedEx continues to support strong positioning and the ability to mitigate cost pressure vs. smaller peers amidst supply chain and labor disruption issues.

The company’s management remains very optimistic about the upcoming quarters in terms of growth, and it has authorized a new $5 billion share repurchase program.

J.P Morgan reported last week that it expects significant upside potential for the transportation and logistics sector, and according to J.P Morgan, FedEx represents a top pick.

J.P Morgan assigned a buy rating on FedEx with a price target of $312 on the company’s stock. Brian Ossenbeck, an analyst from J.P Morgan, added:

Ground margins hit bottom after significant capacity investment and labor shortages ahead of the 2021/2022 peak season. June 2022 investor day should be a catalyst with details on succession planning, LT Ground margins.

FedEx COO Raj Subramaniam also confirmed that many of the headwinds that had curtailed growth over the last couple of quarters have begun to fade.

FedEx has received significantly more applicants for its open positions, which signals that the recent labor shortage has started to recede. According to COO Raj Subramaniam, labor pressures continue to ease, and FedEx remains in the center of a fast-growing e-commerce environment.

The company’s stability in a variety of market conditions has revealed its true staying power, and shares of this company could provide solid returns over the next few years.

$280 represents resistance

FedEx shares have advanced more than 10% since the beginning of December 2021, and according to technical analysis, the bulls remain in control of the price action.

Rising above $280 supports the positive trend, and the next price target could be around $300.

Summary

FedEx reported better than expected second-quarter earnings results this month, and according to J.P Morgan, FedEx represents a top pick. J.P Morgan expects significant upside potential for the transportation and logistics sector and assigned a buy rating on FedEx with a price target of $312.

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