Jim Cramer’s Ultimate Stock Picks: 10 Hot Stocks to Consider

6. FedEx Corporation (NYSE:FDX)

Number of Hedge Fund Investors: 59

Jim Cramer agrees with Baird’s recommendation to buy FedEx Corporation (NYSE:FDX) stock if it experiences any decline. Cramer believes FedEx Corporation (NYSE:FDX) is a strong investment, especially as the Federal Reserve is expected to start cutting interest rates.

“Baird told clients to buy FedEx stock on any weakness. I agree. This is a great stock to own as the Federal Reserve prepares to begin a rate-cutting cycle.”

FedEx Corporation (NYSE:FDX) presents a strong investment opportunity due to its solid financial performance, effective cost-saving strategies, and commitment to operational efficiency. FedEx Corporation (NYSE:FDX)’s recent earnings exceeded expectations, bolstered by its “DRIVE” initiative, which aims to save $4 billion by FY25. In fiscal Q4 2024, FedEx Corporation (NYSE:FDX) reported revenue of about $22 billion and adjusted earnings per share of $5.41, driven by strong performance in its Ground and Freight segments, even though Express faced some challenges.

FedEx Corporation (NYSE:FDX) has raised its earnings guidance for FY25 to $20 to $22 per share and plans to invest $5.2 billion in capital expenditures to improve its operations. FedEx Corporation (NYSE:FDX) has hit a three-year high, reflecting strong investor confidence. Additionally, FedEx Corporation (NYSE:FDX) is boosting shareholder value with a $2.5 billion share repurchase program and a 10% increase in its dividend.

With its focus on cost efficiency, operational improvements, and returning value to shareholders, FedEx Corporation (NYSE:FDX) is well-positioned for continued growth, making it an attractive investment.

Longleaf Partners Fund stated the following regarding FedEx Corporation (NYSE:FDX) in its Q2 2024 investor letter:

“FedEx Corporation (NYSE:FDX) – Global logistics company FedEx was the top contributor for the quarter. Late in the quarter, FedEx reported strong fiscal year results, highlighting a year of strong cost management in a challenging revenue environment. Earnings per share (EPS) increased by 19%, and reduced capital expenditures narrowed the gap between EPS and FCF per share.

With the increase in FCF, the company has become a significant share repurchaser, which is a welcome change. The company also announced a strategic review of their Freight segment. Our appraisal has long accounted for the underappreciated value in FedEx’s less-than-truckload operations. A potential spin-off or sale could unlock substantial value, as comparable companies like Old Dominion trade at significantly higher multiples on revenue, cash flow, and earnings than those applied to FedEx Freight by the market and our appraisal today.”