Shares of the largest U.S. logistics company FedEx (FDX) increased by 28% in the last quarter and by almost 93% since the beginning of 2020.
12 investment companies have increased their target prices/rating in relation to FedEx shares. The latest increase in FedEx shares was received from Barclays on Tuesday, which raised their rating from "neutral" to "outperform" and their target price from $240 to $360.
One Barclays analyst said that the rise in e-commerce is providing FedEx with "many opportunities for growth". According to him, FedEx's terrestrial network "provides the lowest last-mile delivery cost among large private" delivery services in the United States. To match the surge in shipments during the holiday season, FedEx and its UPS rival announced plans to hire 70,000 and 100,000 temporary workers.
At the same time, a Barclays analyst warned that short-term trading in FedEx shares can be highly volatile, given the multidirectional actions of investors against the backdrop of news of strong online retail sales and the COVID-19 vaccine. However, long-term investors should keep an eye on the market trends of the industry in which FedEx dominates, showing better results than its competitor UPS.
On Wednesday, FedEx announced that it intends to purchase ShopRunner, which offers American customers a paid service with a one-year subscription that provides free two-day delivery for online shopping in more than 100 online shops (from cars and electronics to jewellery and clothing). Other benefits include discounts and an increased online shopping cacheback.
These advantages of ShopRunner are similar to what Amazon (AMZN) offers through its Prime subscription service.
President and Chief Operating Officer of FedEx Rajesh Subramaniam said: "This acquisition is in line with our ongoing efforts to create an open, collaborative e-commerce ecosystem that helps sellers ensure smooth operation for their customers".