Raymond James Initiates Coverage on FedEx (NYSE: FDX) Amid Strategic Spin-Off and Tech Advancements

• Analyst firm Raymond James has initiated an "Outperform" rating on FedEx (NYSE: FDX), highlighting positive sentiment for the global logistics giant.
• A significant strategic move involves the spin-off of FedEx Freight, its less-than-truckload (LTL) division, with FedEx retaining a 19.9% ownership stake.
• The company is pursuing ambitious medium-term goals, including strong revenue growth and operating income growth, alongside a focus on technological advancement like self-driving trucks.

Analyst firm Raymond James initiates coverage on FedEx with an "Outperform" rating. FedEx is a global company that provides transportation and e-commerce services. The new rating comes as the stock trades at a price of $329.00, following a daily decrease of $9.49, or 2.80%.

A significant recent event is the spin-off of FedEx Freight, the company's less-than-truckload (LTL) division. A spin-off is when a company separates a part of its business into a new, independent entity. FedEx will keep a 19.9% ownership stake in the newly formed company.

FedEx Freight is now North America's largest LTL carrier, with an estimated 16% market share and a market capitalization of about $28 billion. LTL shipping involves transporting freight that is too large for a parcel service but does not require a full truck. Bank of America (NYSE: BAC) initiated its own coverage with a 'Buy' rating.

The new company has set medium-term goals, including 4% to 6% annual revenue growth and 10% to 12% operating income growth. As highlighted by CNBC, CEO John Smith states the spin-off will help the company "leapfrog" competitors. The company aims for a 15% operating margin by 2029.

Technological advancement is also a key focus. As highlighted by The Wall Street Journal, CEO John Smith says that after a two-year testing period, self-driving trucks are "ready for prime time." He notes that the technology is ready and implementation now depends on government regulators.