Jim Cramer says he is keen to add to his position in FedEx Freight, but the stock’s exposure to FedEx Freight oil pressure is keeping him on the sidelines for now. Speaking during the CNBC Investing Club Morning Meeting on Tuesday, Cramer said the stock has to get clear of rising oil prices before he is comfortable buying more.
‘I very much want to buy’ more FedEx Freight, Cramer said, before adding that the stock first needs to shake off its sensitivity to crude. He attributed the company’s recent share price slide not to management missteps but to broader concerns about tariffs and the direction of oil.
Analysts line up behind FedEx Freight with bullish price targets
The timing of Cramer’s comments coincided with a wave of analyst enthusiasm for the stock. On Tuesday, JPMorgan initiated coverage with a buy-equivalent overweight rating and a price target of $160, which analysts described as more than 20% above Friday’s closing price. ‘We see a clear path for the largest less-than-truckload carrier in North America to improve profitability and service as a stand-alone company,’ analysts wrote in a note to clients.
JPMorgan is not alone in its optimism. According to Benzinga, Goldman Sachs analyst Jordan Alliger has also initiated coverage on FedEx Freight with a Buy rating, setting a price target of $186, a more ambitious mark than JPMorgan’s. That range of bullish calls from major Wall Street banks suggests institutional confidence in the company’s long-term trajectory, even as near-term macro headwinds keep some investors cautious.
FedEx Freight’s own management laid out its financial ambitions at an investor day held in April. According to CNBC, management estimated the company would generate $8.7 billion in revenue in 2026, with adjusted operating income of about $1.1 billion, representing a margin of roughly 12%. Over the medium term, the company is targeting compound annual revenue growth of 4% to 6%, alongside adjusted operating income growth of 10% to 12%.
FedEx Freight oil pressure sits inside a jittery market
Tuesday’s session was a difficult one across markets more broadly. Stocks came under pressure after the United States and Iran exchanged attacks over the weekend, sending oil prices higher. Bond yields moved up alongside crude, stoking inflation concerns and pushing market odds on a Federal Reserve interest rate hike at next week’s meeting to over 58%.
Technology stocks also took a hit. OpenAI’s launch of its new GPT-6 Astra model was described by Cramer as ‘one of the things roiling the market,’ with software stocks falling on renewed fears about artificial intelligence disruption. Salesforce, which Cramer said had been recovering, dropped 3.5% on the news, putting the club holding back into what he called ‘software purgatory.’
Away from technology, there was brighter news for another club holding. Eaton was upgraded at UBS to buy from neutral in a Monday note, with analysts lifting their price target to $515 from $450, implying more than 25% upside from Friday’s close. Shares of the power management company gained 3.5% on Tuesday. UBS expects continued strength from data centre and aerospace end-markets to drive strong top-line performance.
Cramer endorsed the upgrade and offered a broader case for Eaton beyond its data centre exposure. ‘The electric grid is going to need fixing regardless of what happens with the data center,’ he said, adding that the company ‘is really good because it’s not all data center.’
Stocks also covered in the rapid-fire segment at the close of Tuesday’s meeting included GE Aerospace, Lockheed Martin, Novartis, Bloom Energy and Qualcomm. Cramer’s charitable trust holds positions in Salesforce, FedEx Freight and Eaton. For FedEx Freight, the next move hinges on oil: Cramer has made clear he is watching crude prices before pulling the trigger on further purchases, with the $160 and $186 analyst price targets waiting in the wings if conditions improve.
