JPMorgan Upgrade Boosts FedEx Ahead of June 1 Freight Spin

JPMorgan upgraded FedEx to Overweight from Neutral and raised its price target to $460 from $432, sending shares up 3.4% to $413.70. FedEx plans to separate its less-than-truckload business into a standalone company named FedEx Freight on June 1. Existing FedEx shareholders will receive one FedEx Freight share for every two FedEx shares they own.

The upgrade came from JPMorgan analyst Brian Ossenbeck, who cited growing confidence in FedEx’s restructuring and improvements in its parcel operations. Ossenbeck wrote that he believes “the relative risk/reward is attractive heading into the separation of the Freight business on June 1,” and pointed to progress tied to the Network 2.0 program and the company’s European transformation work.

FedEx Freight will focus on less-than-truckload, or LTL, shipping, which consolidates partial truckloads for customers that do not require a full truck. The new company is expected to be the largest North American LTL carrier serving small and medium-sized businesses.

JPMorgan applied a 9.5-times EBITDA multiple to FedEx’s fiscal 2027 parcel business and raised its freight multiple estimate to 14 times. The bank projects FedEx Freight will record about $8.7 billion in revenue and $1.1 billion in operating profit in fiscal 2026. Consolidated FedEx is forecast to produce nearly $94 billion in revenue and about $6.5 billion in operating income.

JPMorgan noted FedEx Freight may initially trade at a modest discount to LTL peers because of transaction costs and execution risk, and that the valuation gap could narrow as yield, service and operational efficiency improve after the spin-off.

FedEx shares have climbed roughly 82% over the past 12 months, compared with about a 5% gain for United Parcel Service over the same period. On the session of the upgrade, UPS rose about 2.1% to $104.19. Analyst data show roughly 63% of analysts covering FedEx rate the stock a Buy, versus 48% for UPS.

Investors will also watch FedEx’s fiscal fourth-quarter earnings report on June 23. Wall Street consensus expects earnings per share of $5.91 for the quarter; Ossenbeck forecasts $6.40. JPMorgan wrote that it views the spin-off as a near-term catalyst that should improve transparency and allow investors to value each business more precisely.