FDX Stock Today: January 22 Argus ‘Strong Buy’ fuels spin-off rally
FedEx stock got a lift on January 22 after Argus raised its view to Strong Buy, spotlighting value from the planned FedEx Freight spin-off by June 2026. The debate is now about how much rerating the split could drive and which margins are sustainable. For Canadian investors, currency and tax factors also matter. We break down the upgrade, the FDX price target range of 210 to 360 USD, and the key numbers to watch.
Argus upgrade and spin-off math
Argus moved FedEx stock to Strong Buy, arguing the FedEx Freight spin-off could surface value and narrow the conglomerate discount. The call leans on margin expansion and more focused capital use after the split planned by June 2026. The upgrade lands amid a wide 210 to 360 USD FDX price target range and mixed Street views source.
FedEx stock screens reasonably priced on several metrics while investors debate spin-off upside. TTM price-to-sales is 0.81 and EV-EBITDA is 9.95. If the LTL unit commands a higher multiple, consolidated value could rise, especially with operating margin at 6.81 percent and improving. Efficiency levers include network optimization, disciplined capex, and mix shift toward higher-margin freight and ground segments.
What the Street is saying
The upgrade arrives as other firms stay cautious. The tally shows 18 Buys, 8 Holds, and 2 Sells. One recent view says the rally already prices in spin-off gains source. That split keeps FedEx stock sensitive to updates on margins, LTL yields, and any timeline details from management.
Next up is earnings on March 19, 2026. Watch guidance on segment margins, capex, and separation costs. Balance sheet quality is solid with interest coverage at 12.42 and current ratio at 1.27, though debt-to-equity is 1.34. Dividend yield is 1.85 percent on a 5.73 USD payout. For Canadians, currency swings can boost or reduce returns on FedEx stock.
Valuation and key metrics to watch
Core returns look steady. Return on equity is 15.67 percent and earnings yield is 5.77 percent. Free cash flow yield runs near 5.96 percent against a price-to-free-cash-flow of 16.78. Operating cash flow per share is 33.74 USD. If margins continue to firm while FCF holds, FedEx stock can support buybacks and dividends without stretching leverage.
Net debt to EBITDA stands at 2.98, offering room if the cycle softens. Capex is 4.27 percent of revenue, with a capital expenditure coverage ratio of 2.13. Weighted average shares fell about 2.36 percent year over year, signaling active buybacks. We would track working capital trends and any commitment shifts as the FedEx Freight spin-off approaches.
Technical picture and levels
Momentum is strong with RSI at 79, MACD positive, and ADX at 21.57. Price sits near the Bollinger upper band at 311.87 USD. The 50-day average is 284.73 USD and the 200-day is 242.14 USD. Year high is 318.83 USD. FedEx stock looks overbought on several oscillators, so pullbacks to moving averages may offer better entries.
We like staged entries for FedEx stock given overbought signals and event risk into March 19. Canadians should compare FX-inclusive costs and consider hedging if the CAD weakens. US dividends face withholding tax. Liquidity is best on the NYSE for FDX. Add on dips if guidance supports margin progress and spin-off timing.
Final Thoughts
Argus’s Strong Buy puts the spin-off story front and centre, with upside tied to margin gains and a possible multiple lift if the LTL unit commands a richer valuation. The Street remains split, so the next earnings update and separation milestones will steer sentiment. Our playbook for Canadians: 1) track profitability, cash generation, and any spin-off filings, 2) plan entries around key technical levels and the earnings date, and 3) manage CAD-USD exposure and dividend tax treatment. If execution holds and cash stays strong, FedEx stock can compound through buybacks and dividends while the freight separation aims to unlock value.
FAQs
What did Argus change on January 22 and why does it matter?
Argus raised its view to Strong Buy, arguing the planned FedEx Freight spin-off by June 2026 could unlock value and support a rerating. The call highlights improving margins, stronger cash generation, and a wide 210 to 360 USD FDX price target range. It sharpens focus on execution, separation costs, and near-term guidance.
How could the FedEx Freight spin-off affect shareholders?
A spin-off can surface value if the LTL unit earns a higher market multiple. Investors might get separate exposure to a capital-light, margin-friendly business. Key watch items are pro forma margins, debt allocation, tax impacts, and any one-time costs. Clear timelines and filings will help size the upside for FedEx stock holders.
Is FedEx stock expensive after the rally?
On TTM figures, valuation is balanced: PE near 17.36, EV-EBITDA around 9.95, and free cash flow yield close to 5.96 percent. These are not stretched for a high-quality operator. Upside depends on steady margin progress, disciplined capex, and proof the spin-off delivers better growth and returns.
What should Canadian investors consider before buying?
Check total costs in CAD, including FX spreads and commissions. Decide whether to hedge currency. Account for US dividend withholding tax and how it fits in registered vs taxable accounts. Set entries around key levels and the March 19 earnings date. Build positions gradually while monitoring spin-off milestones for FedEx stock.
Disclaimer:
The content shared by Meyka AI PTY LTD is solely for research and informational purposes. Meyka is not a financial advisory service, and the information provided should not be considered investment or trading advice.
