Good morning. Here's your daily equity research roundup from the Street.
- FedEx (FDX): Analyst Thomas Wadewitz notes that "restructuring could provide upside vs. low expectations," saying that at a forward P/E ratio of only 11.4x, negative macro headwinds are already priced in to the stock. No change to price target.
- TD Ameritrade (AMTD) and Charles Schwab (SCHW): Citi analyst William Katz is downgrading both AMTD and SCHW to Neutral from Buy. He says that "interest rate and retail trading re-engagement risks" are rising again, "which increasingly call into question: a) near term EPS power; and, b) timing of more normalized EPS." The downgrades are accompanied by price target changes on both stocks: AMTD is revised to $18 from $22 and SCHW is revised to $13 from $20.
- General Motors (GM): Analyst Colin Langan comments on GM's announcement that it will offload $26 billion of its $134 billion of pension obligations to Prudential. Langan has "doubts this creates value for shareholders," saying that 1) GM paid too much to initiate this transfer at a cost of $3 billion; 2) actually funding the pensions would be a better option to address pension risk, and 3) there is "surprisingly little correlation between PE valuations and pension exposure" to begin with.
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