FedEx Announces $1.5B Accelerated Share Buyback; Shares Rise

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FedEx Corporation (FDX) announced an accelerated share repurchase agreement (ASR) of $1.5 billion with Goldman Sachs & Co. LLC (GS). Shares jumped 1% momentarily on the news, and closed the day down 2% on December 20.

According to the terms of the program, Goldman will initially deliver approximately 4.8 million shares at current market prices. The remaining shares will be repurchased at a discount.

The ASR is part of the company’s $5 billion share repurchase program disclosed during its second-quarter results, and is expected to complete before the current fiscal year-end.

FedEx already has 2.3 million shares waiting to be repurchased under its 2016 share repurchase program. The company has repurchased approximately $750 million of common stock year-to-date.

Analysts’ View

Recently, UBS analyst Thomas Wadewitz cut the price target on the stock to $343 (39.7% upside potential) from $369 while maintaining a Buy rating.

Overall, the stock commands a Strong Buy consensus rating based on 18 Buys and 4 Holds. The average FedEx price target of $310.71 implies 26.5% upside potential to current levels. Shares have lost 9.7% over the past year.

Website Traffic

TipRanks’ Website Traffic tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into FDX’s performance.

In November, FedEx website traffic recorded a 1.44% year-over-year increase in monthly visits. Similarly, year-to-date website traffic growth increased by 18.79% compared to the same period last year.

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