FedEx Shares on Pace for Largest Percent Increase Since 1986 Over Freight-Business Review
By Sabela Ojea
Shares of FedEx climbed on Wednesday, a day after the company said that it is reviewing its freight business to assess the role it plays in its portfolio.
The stock was up 15%, to $293.87, in midday trading, on pace for the largest percent increase since 1986. Shares have increased 16% since the beginning of the year.
The Memphis, Tenn.-based package-shipping company said the review, conducted by the management team, board of directors and outside advisors, is well underway and it is committed to complete it by the end of 2024.
Analysts at Morgan Stanley and Raymond James believe the move suggests FedEx could be considering a potential spinoff the freight business.
"This will not come entirely as a surprise to the market, as this opportunity has been theorized around FedEx for the last few years and coming out of the Drive event in April 2023 we noted that one of our most interesting takeaways from the event was FedEx making FedEx Freight a 'stand-alone company,' which set up for a potential spin," Morgan Stanley analysts said in a research note.
Raymond James analysts believe a spinoff the freight business is possible, and note it might be the most optimal option for FedEx.
Write to Sabela Ojea at sabela.ojea@wsj.com
(END) Dow Jones Newswires
June 26, 2024 13:15 ET (17:15 GMT)
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