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FedEx (FDX) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
·3-min read

FedEx (FDX) closed at $245.05 in the latest trading session, marking a +1.75% move from the prior day. This change outpaced the S&P 500's 1.17% gain on the day. Elsewhere, the Dow gained 1.87%, while the tech-heavy Nasdaq added 0.62%.

Prior to today's trading, shares of the package delivery company had lost 0.8% over the past month. This has was narrower than the Transportation sector's loss of 5.05% and the S&P 500's loss of 2.46% in that time.

Wall Street will be looking for positivity from FedEx as it approaches its next earnings report date. This is expected to be December 16, 2021. On that day, FedEx is projected to report earnings of $4.21 per share, which would represent a year-over-year decline of 12.84%. Meanwhile, our latest consensus estimate is calling for revenue of $22.51 billion, up 9.44% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $19.43 per share and revenue of $90.46 billion. These totals would mark changes of +6.93% and +7.75%, respectively, from last year.

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It is also important to note the recent changes to analyst estimates for FedEx. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.32% lower. FedEx is holding a Zacks Rank of #3 (Hold) right now.

Valuation is also important, so investors should note that FedEx has a Forward P/E ratio of 12.39 right now. Its industry sports an average Forward P/E of 16.02, so we one might conclude that FedEx is trading at a discount comparatively.

It is also worth noting that FDX currently has a PEG ratio of 1.03. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. Transportation - Air Freight and Cargo stocks are, on average, holding a PEG ratio of 1.43 based on yesterday's closing prices.

The Transportation - Air Freight and Cargo industry is part of the Transportation sector. This industry currently has a Zacks Industry Rank of 51, which puts it in the top 21% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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