By Ben Levisohn
Argus Research analysts John Eade and James Kaltman explain why they raised their target price on FedEx to $169 from $162:
This large-cap freight company has emerged from two negative quarters – when operations were hurt by severe weather – and is now in position, in our view, to deliver positive EPS surprises. Management continues to plow cash back into the company, which we think sets the stage for future efficiencies and margin improvement. High fuel costs are a wild card, but FedEx has a history of successfully passing along these costs to customers. The shares are trading near the high end of their 52-week range of 99-$154, but we see momentum for additional earnings surprises and stock market gains.
Shares of FedEx have dropped 0.7% to $150.32 at 33:31 p.m. today.