FedEx (FDX) provided a substantially improved profit forecast for its fiscal year of 2024. Updated numbers came at the end of last week. As a result, the market value of this well-known conglomerate holding focused on transportation, e-commerce and business services initially added nearly 10% after the opening bell on Friday, March 22. The share price adjusted slightly after the weekend but managed to retain most of the sudden gains. Retesting historical peaks around $320 (May 2021) now looks plausible.

Although "weakness in global trade" may still "constrain demand" in the multinational business of FedEx, which has "remained challenged for longer than expected", according to the company's CEO Raj Subramaniam, he also tightened the parcel delivery firm's annual projections by releasing newly expected earnings per diluted share within a $15.65 to $16.65 range. This sounds more precise or marginally better compared to FedEx' own previous forecast of $15.35 to $16.85 per share. The firm is also planning "permanent cost reductions" from the so-called DRIVE transformation program of $1.8 billion, with capital spending cutting to $5.4 billion, compared to the prior forecast of $5.7 billion. A priority on improving efficiency investments is declared, including modernization measures for fleet and facilities and network optimization. An important part of the report was that operating margins at the FedEx segment occupied by its Express overnight-delivery provider reached 2.5% in the recent quarter, from 1.2% a year ago. Parking aircraft time minimization, reducing flight hours and flying by fewer or less costing jets gave higher capacity utilization.

Taken together, these allowed the Wall Street crowd and most experts to feel a new wave of positive attitude to FedEx market prospects. "FedEx hit all the high notes this time with lower capex, a reloaded buyback program and a beat in Express off low expectations," J.P.Morgan analysts said in a note. They meant buying back $500 million worth of FedEx shares in the current quarter in the frame of a new $5 billion share repurchase program approved by the company's board. Those considerations were enough for broader pools of investors to put aside less revenue in the last reported quarter as it fell 2.3% YoY to $21.7 billion and thus missed consensus at around $22 billion. Several brokerage houses raised their price targets on FedEx. The average analysts' price target for 12 month is now above $307 per share, compared to nearly $287 in the first fifteen minutes of the regular trading session today (Tuesday, March 26), with $275 seemingly representing strong technical support as the price quickly bounced off the area a day before.