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FedEx Freight shares surge as analysts back growth targets after quarterly beat

By Reuters News

Oct 30 (Reuters) - Shares of FedEx Freight FDXF.N surged 14% in early trading on Friday, with analysts backing the trucking firm's 2027 growth expectations after it forecast fourth-quarter profit above their estimates.

The stock, listed on June 1 after the company's spinoff from parent FedEx, is on track for its biggest-ever single-day jump and its first-ever monthly gain.

Here are some more details.

  • Memphis-based FedEx Freight posted third-quarter adjusted profit and revenue above analysts' estimates and forecast fourth-quarter profit above estimates on Thursday

  • Fourth-quarter guideposts for key revenue drivers all appear to signal improvement from the third quarter and the first half of the year, Evercore ISI analysts said

  • Jefferies said the results show that the company's ability to meet its medium-term targets is "becoming more achievable"

  • FedEx Freight CFO Marshall Witt said the company's 2027 revenue growth would be in line with a 4%-6% medium-term target, while adjusted operating margin would progress towards its goal of 15%

  • Witt also said some of the company's clients are bringing their suppliers along with them, highlighting potential for higher freight volume

  • FedEx Freight's short-term earnings have taken a hit from FedEx separation costs and expenses tied to tech upgrades, but the company is working to improve yields in a bid to boost revenue

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