FedEx (FDX) is set to see a "greater potential tailwind" from pricing and cost control, leaving significant upside potential as its margins improve over multiple years, UBS Securities said in a Wednesday note.

The brokerage said both FedEx and peer United Parcel Service (UPS) signaled an improving pricing environment, reflected in stronger revenue per piece, which the firm views as a meaningful earnings lever.

The investment firm said it expects FedEx to update its Network 2.0 program and outline further cost initiatives to boost operating margins beyond current targets.

UBS raised its fiscal 2027 and 2028 earnings per share estimates for the company to $22.53 and $25.53 from prior estimates of $20.94 and $23.57.

The firm increased its price target on FedEx to $412 from $314 and reiterated its buy rating.

Shares of FedEx were up more than 2% in recent trading.

Price: 361.95, Change: +8.52, Percent Change: +2.41