By Kim Khan
Delivery giant FedEx (NYSE:FDX) rose Monday as Wall Street applauded its decision to further integrate its Express and Ground units announced last week.
Shares of FedEx rose 1.8% in midday trading.
FedEx said its subsidiary Express would use fellow subsidiary FedEx (NYSE:FDX) Ground to help deliver time-sensitive e-commerce packages.
Following this decision, which helped shared jump Friday, UBS upgraded the stock to buy from neutral today.
Analyst Thomas Wadewitz raised his price target on the stock to $181 from $167 per share, estimating cost savings could reach $600 million a year.
“FedEx’s move to hand off delivery of a significant portion -- we estimate 60% --of its residential Express packages to the Ground network for delivery is likely to drive significant cost savings,” Wadewitz wrote in a note, according to Barron’s.
Of 28 analysts covering the stock, 13 have a buy rating on the stock, 14 are neutral and there is one sell rating, according to .
The average price target is $170.72 per share.
