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Who’s Afraid of the Big Bad Amazon? UPS, FedEx Set to Soar

Thus he started coverage of UPS, also on the firm's Conviction Buy List, with a Buy rating and $148 price target. He launched coverage of FedEx with a Buy rating and $270 price target.

He he a Buy rating on XPO Logistics (XPO) as well, along with Neutral ratings on C.H.Robinson Worldwide (CHRW) and Expeditors International of Washington (EXPD).

Reustle also initiated coverage on the Airfreight/Logistics sector as a whole, with 16% average upside to his price targets:

The drivers to our view are: 1. Acceleration in global trade driving high margin growth for global businesses like FDX, UPS, and XPO; 2. The potential upside catalyst around peak season in the near-term; and 3. Valuations trading below historical levels (20.6x vs. 21.4x), which suggests to us that investors do not expect sector growth and margins to meaningfully expand from here. We believe the market is missing the acceleration in global trade and the limited competition abroad for FDX and UPS. We also see “cross-border e-commerce” as an emergent opportunity.

FedEx is up 0.4% and UPS is up 0.6% in recent trading.