Jefferies analysts upgraded FedEx (NYSE:FDX) from Hold to Buy, assigning a new price target of $275, slightly down from the previous $300, but reflecting renewed confidence in the company’s internal transformation efforts. As a result, shares surged more than 5% on Monday.

While broader market attention remains fixated on macroeconomic headwinds, Jefferies believes investors are overlooking FedEx’s structural cost improvements, which could drive earnings growth through fiscal 2026 and 2027, even in a sluggish revenue environment.

Key to this outlook are the company’s Network 2.0 restructuring initiative and its Tri-Color optimization strategy, both aimed at streamlining operations and improving profit margins. The analysts view these programs as underappreciated catalysts that could unlock substantial value over the next two years.

In addition, Jefferies highlights that any rebound in industrial activity—a major revenue driver for FedEx—could provide a significant earnings tailwind, amplifying the impact of internal efficiency gains.

Despite recent cuts to guidance and macro pressures, Jefferies sees a favorable risk-reward setup for FedEx, supported by operational transformation and potential cyclical upside, making the stock attractive at current levels.