FedEx Freight Drops 13.8% in NYSE Debut as J.P. Morgan Flags Spin-Off Risks

2 articles · Updated · Reuters · Jun 1

FedEx Freight fell as much as 13.8% from its opening price after beginning regular NYSE trading as a standalone company following its split from FedEx.
J.P. Morgan said the stock deserves a lower valuation than XPO, Saia and Old Dominion because of execution risk, separation costs, and persistent weakness in service and volume metrics.
Shares opened 2.3% higher at $164, above the $160.37 when-issued price from last week, before reversing; FedEx Corp. was little changed at $333.30.
The debut comes as freight rates may be emerging from a four-year slump, while FedEx Freight has projected medium-term revenue growth of 4% to 6% and core profit growth of 10% to 12% despite near-term margin pressure.

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