By Yasin Ebrahim and Senad Karaahmetovic

-- FedEx lifted its guidance Thursday after reporting third quarter earnings that markedly beat expectations as its ongoing efforts to cut costs helped offset ongoing demand weakness.

FedEx Corporation (NYSE:) shares are trading 11% higher in pre-open Friday following the report.

FedEx earnings per share of $3.41 on revenue of $22.20 billion. Analysts polled by Capital IQ anticipated EPS of $2.76 on revenue of $22.74B.

"Third quarter results were negatively affected by continued demand weakness, particularly at FedEx Express," the company said. Cost-cutting efforts, however, partly blunted the impact of weaker demand and inflation on operating income, it added.

"We've continued to move with urgency to improve efficiency, and our cost actions are taking hold, driving an improved outlook for the current fiscal year," the company said.

In fiscal 2023, the company upgraded its guidance on adjusted EPS in the range of $13.80 to $14.40, up from $12.50 to $13.50 previously.

"Our improved earnings outlook demonstrates confidence in our ability to execute while managing the continued global volume softness we are experiencing across the business," the company said.

Stifel analysts raised the rating to Buy from Hold and the price target to $222 per share from the prior $171.

"Emerging consensus around an inventory bottom and pull forward with early signs of execution on two significant tranches of cost savings initiatives ($3.7bn and $4bn, respectively) present a compelling investment opportunity at the current, deeply-discounted valuation, in our view," the analysts wrote in a note.

Citi analysts raised the price target by $25 to $275 per share.

"Beyond the beat and F4Q raise, we think the potential earnings upside in F24 is quite large, as FedEx posted solidly better... With upcoming catalysts coming from DRIVE day on April 5th and a relatively low F4Q hurdle, we would expect strong upside follow through from FedEx shares," the analysts said.