FedEx stock pops after earnings beat, raised 2023 full-year outlook

The Yahoo Finance Live team discusses the jump in FedEx's stock after the company raised its 2023 outlook.

Video transcript

SEANA SMITH: All right, let's also take a look at FedEx. That's our final mover of the week. Shares ending today, up just about 8%. That big [? pop ?] higher coming after upbeat guidance here from the company. FedEx's full year earnings forecast coming in stronger than expected. It sees adjusted earnings per share between $14.60 to $15.20. Well, that's up from its prior forecast of between $13 and $14. FedEx claiming that cost-cutting measures here will offset some of that demand weakness, some of the weakness that we are seeing in the packaging space.

Thursday, we did hear from Anthony DeRuijter following these results, ahead of the earnings call. He's of Third Bridge. And, yeah, he was a little bit skeptical about that cost-cutting plan, wanted a little bit more details over the next six weeks. Let's take a listen to what he had to say.

ANTHONY DERUIJTER: There's a big reward, seemingly, from investors for pulling off the cost-cutting action. So it really comes down to our people telling us that FedEx has to be more clear on what they're planning for these big cost cuts. So for example, Drive, the big Drive program for fiscal 2024-- $4 billion in savings. Where is that going to come from?

SEANA SMITH: Some skepticism there, although I don't know if skepticism is really fair. I think we're just looking for more details, Anthony is there. But when it comes to the broader street reaction, Citi, which has a buy rating on the stock, raised its price target to 275 bucks a share. Cowen was also positive on these results, saying that FedEx is well positioned to see improving results in the second half of the calendar year this year and also into next year. So we're seeing that reaction in shares today, the stock closing up just about 8% in this.

- Yeah, that's right. And a lot of the cost cutting that they are doing is with Express, their air carrier. So they've reduced flights. They have parked some older planes as customers are shifting more now to cargo and chips after the whole supply chain snags have been sort of cleared away. So a lot of questions, though, about how this cost cutting will move-- go forward.