UBS values FedEx's upcoming freight spin-off at $213/share, sees growth and margin gains ahead.

UBS maintains a Buy rating on FedEx with a $445 price target as the company prepares to spin off its freight business, FDXF, next week. UBS values the freight unit at $213 per share and the remaining parcel business, FEC, at $338 per share using a sum-of-the-parts approach. The bank forecasts earnings growth and margin improvements for both entities by 2027, driven by operational efficiencies and market conditions. The freight unit is expected to benefit from technology investments and sales expansion, while the parcel business will gain from network mergers in the US.