How Analysts View FedEx After Earnings

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When FedEx Corp. (NYSE: FDX) released its fiscal third-quarter earnings report after markets closed Tuesday, overall the results missed estimates. But it seems that the impact was not that severe as shares traded up on Wednesday, after initially trading down in the after-hours session on Tuesday. Also analysts took a relatively positive view on the report and most hiked their price targets.

24/7 Wall St. has included some highlights from the earnings release, as well as what a few analysts said about FedEx after the report.

The package delivery service posted earnings per share (EPS) of $2.07 on revenues of $15 billion. Thomson Reuters consensus estimates had called for EPS of $2.62 and $14.99 billion in revenue. In the same period a year ago, FedEx reported adjusted EPS of $2.51 on revenue of $12.65 billion.

The company said that operating results were affected by the significantly negative net impact of fuel costs, one fewer operating day at FedEx Express and FedEx Ground, and network expansion at FedEx Ground. These factors were partially offset by the benefits from yield growth at all the company’s transportation segments.

Not including mark-to-market pension adjustments, FedEx expects adjusted EPS of $10.80 to $11.30 for the full fiscal year, including TNT Express results. Excluding other one-time charges, the company said it expects fiscal year earnings of $11.85 to $12.35 per share. Capital spending is now tabbed at $5.3 billion, down by $300 million, attributed to lower spending at FedEx Ground. Consensus estimates call for $12.00 in EPS for the full fiscal year.

A few other analysts weighed in on FedEx as well:

  • Credit Suisse reiterated an Outperform rating and raised its price target to $229 from $219, noting that the market should shrug off an initial earnings miss as the stage is set for significant growth at FedEx Express.
  • Merrill Lynch reiterated a Buy rating and raised its price objective to $230 from $220.
  • Baird has an Outperform rating and raised price target to $222 from $209.
  • Deutsche Bank raised its price target to $210 from $209.
  • JPMorgan raised the price target to $236 from $230.
  • Morgan Stanley raised its price target to $144 from $135.
  • Raymond James raised its price target to $220 from $210.
  • Stifel has a Hold rating and raised the price target to $194 from $189.
  • Oppenheimer reiterated an Outperform rating and raised its price target to $218 from $214.

Shares of FedEx were last seen up 1.6% at $194.80 on Wednesday, with a consensus analyst price target of $211.14 and a 52-week trading range of $145.00 to $201.57.