(CercleFinance.com) – Wells Fargo renewed its ‘overweight’ advice on FedEx on Friday, while reducing its price target on the stock to $199 following the warning issued last night by the express delivery giant.
“We were expecting a complicated quarter, but its preliminary results are well below our estimates and below the most pessimistic market forecasts,” said analysts at the Californian bank.
If Wells Fargo recognizes that the financial community will not fail to reconcile the difficulties of the group with the economic situation, the establishment notes that its management team will have to tackle the difficult task of regaining the confidence of the market.
Given that the past quarter was the first to follow the strategic growth measures presented by the new chief executive, Raj Subramaniam, at the analyst conference in June, this misstep hardly inspires confidence, notes Wells Fargo in his note.
The American bank nevertheless estimates that once the costs of the carrier will have adjusted to the evolution of its revenues, the earnings per share (EPS) could experience an inflection point and reveal the attractive valuation of the group on the stock market.
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