FedEx Freight Holding Company, Inc.

FDXF

Market cap $23.5B

Shares of newly-independent FedEx Freight turned out to be a haven for investors on Friday.

FedEx Freight Holding Company, Inc. trades at ~$150 post-spin, with valuation reflecting mid-twenty times pro forma earnings and uncertain near-term margins. FDXF targets mid-single-digit sales growth, margin expansion from 12% to 15%, and capital spending at 5% of sales. Near-term margin pressure is likely due to corporate cost allocation and transition service agreements, making current valuation less compelling.