Shares of FedEx Corp. (NYS:FDX) rallied 1.2% in morning trading Thursday, to pace the gainers in the Dow Jones Transportation Average (DJX:DJT) , after Stifel Nicolaus analyst David Ross turned bullish on the package delivery giant, citing signs that FedEx has been a beneficiary of the COVID-19 pandemic. The stock's rally comes as the Dow transports inched up less than 0.1% and shares of chief rival United Parcel Service Inc. (NYS:UPS) shed 0.8%. In a research note titled, "Upgrading to buy; FedEx Flying High With Growing Package Pie," Ross raised his rating after being at hold for the past year, while boosting his price target to $281 from $175. "The big move in FDX off the lows earlier this year (Exhibit 1) has been warranted, in our view, as the world didn't come to an end, and FedEx has shown it is a "winner" from this odd 'pandemic' period," Ross wrote in a note to clients. The stock has rocketed 170% since closing at a more-than 7-year low of $90.49 on March 16, while UPS shares have rallied only 84% over the same time. Despite the outperformance off the post-COVID lows, Ross said FedEx's stock still trades at "an above-average discount" to UPS's. Year to date, FedEx shares have rallied 61.5%, UPS's stock has advanced 36.6%, the Dow transports has tacked on 1.8% and the Dow Jones Industrial Average (DOW:DJIA) has slipped 5.9%.
Sept. 24, 2020, 10:10 a.m. EDT