SA: BAML expects FedEx to boost buybacks
SEEKING ALPHA reports: “Bank of America Merrill Lynch thinks FedEx (FDX +0.8%) could add $2.5B ...
While bankers and the more mainstream media have expressed concern that FedEx and UPS could be impacted by Amazon Air operations, a Bernstein research note backs FedEx’s claims that Amazon is not a current credible threat. The analyst points to the fact that Amazon’s network is predicated on its internal network, while FedEx and UPS have a hub-and-spoke delivery network, developed over decades. The analyst notes: “FedEx’s Memphis-based network touches 130 places multiple times per day, whereas the Amazon Prime Air network touches 20 places and each of those places does not get daily service.
“As a result, we think Amazon Prime Air has a more limited commercial value proposition for expedited products shipped via FedEx or UPS and is not necessary for deferred products.” ATW reports