What to Watch When FedEx Reports After the Close

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FedEx Corp. (NYSE: FDX) is scheduled to release its fiscal third-quarter financial results after the markets close on Tuesday. Consensus estimates call for $3.11 in earnings per share (EPS) and $17.67 billion in revenue. The same period of last year reportedly had EPS of $3.72 on $16.53 billion in revenue.

The company operates in four segments: FedEx Express (57% of revenues), FedEx Ground (30% of revenues), FedEx Freight (11% of revenues) and FedEx Services (3% of revenues). FedEx offers a variety of transport services to more than 220 countries, and it is a complete global service provider of transport and supply-chain solutions.

In its most recent quarter, the parcel shipping giant blamed current trade policies and the market totally ignored that it had beaten earnings expectations. FedEx lowered its 2019 earnings guidance to $15.50 to $16.60 in per share, down from a prior range of $17.20 to $17.80. Consensus estimates currently are $15.97 in EPS and $70.88 billion in revenue for the full fiscal year.

Deutsche Bank recently issued a Buy rating with a $212 price objective and had this to say:

FedEx shares trade at exactly 10 times fiscal 2020 EPS (ending May 2020), representing near-historic lows relative to the broader market. Also noteworthy, this valuation is in the context of significant downward revisions to estimates in recent weeks, with Street estimates erasing over $1 billion in fiscal 2020 profits related to the company’s prior profit improvement plan.

A few other analysts also weighed in on FedEx ahead of the results:

  • Raymond James has an Outperform rating and a $230 price target.
  • Cowen has an Outperform rating with a $237 price target.
  • UBS has an Outperform rating with a $200 target price.
  • Berenberg Bank has a Buy rating and a $245 price target.
  • JPMorgan has a Buy rating with a $233 target price.

Overall, FedEx has performed more or less in line with the broad markets, with its stock up about 13% year to date. In the past 52 weeks, the stock actually is down 26%.

Shares of FedEx were last seen trading at $182.79, in a 52-week range of $150.94 to $266.67. The consensus price target of $221.40.

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