FedEx Stock Floats Higher on Analyst Bull Note

Calls are popular in the options pits amid cheap options

Deputy Editor
Aug 7, 2020 at 9:14 AM
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The shares of FedEx Corporation (NYSE:FDX) are up 0.3% at $172.24 at last check, after brokerage firm Stephens hiked up its price target to $215 from $180, reiterating its "overweight" rating. The firm called FedEx its "Best Idea" for the rest of 2020, and sees a slew of potential support for the stock to move upward, including pricing power and a rebound in business-to-business demand. 

FDX has been steadily rising on the charts since gapping higher in early July, with support from its 10-day moving average. Year-to-date, the equity is up around 14%, and eyeing its fifth week of gains out of the last six. 

Despite the positive price action in the last month, analysts are still hesitant on FedEx stock. Nine out of the 19 analysts in coverage sport a "buy" or better, while the remaining 10 linger at a "hold" rating. Meanwhile, today's bull note could be just the beginning of a round of price-target hikes, as the stock's 12-month consensus price target of $170.96 is a 0.7% discount to last night's close. 

The options pits, however, are looking much more bullish. FDX's 10-day call/put volume ratio of 4.68 at the Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands higher than 97% of all readings from the last year. This reveals long calls are being picked up at a much faster-than-usual clip. 

That said, now may be a good time to weigh in on FDX's next move with options. The stock's Schaeffer's Volatility Index (SVI) of 29% stands higher than just 6% of all other readings in its annual range, implying that options players are pricing in relatively low volatility expectations at the moment. 


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