FedEx (FDX) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research

FedEx (FDX) closed at $162.24 in the latest trading session, marking a -0.6% move from the prior day. This change lagged the S&P 500's 0.2% loss on the day. At the same time, the Dow added 0.04%, and the tech-heavy Nasdaq lost 0.13%.

Coming into today, shares of the package delivery company had gained 15.46% in the past month. In that same time, the Transportation sector gained 12.75%, while the S&P 500 gained 7.08%.

Wall Street will be looking for positivity from FDX as it approaches its next earnings report date. This is expected to be December 17, 2019. In that report, analysts expect FDX to post earnings of $2.86 per share. This would mark a year-over-year decline of 29.03%. Meanwhile, our latest consensus estimate is calling for revenue of $17.58 billion, down 1.38% from the prior-year quarter.

FDX's full-year Zacks Consensus Estimates are calling for earnings of $12.11 per share and revenue of $69.72 billion. These results would represent year-over-year changes of -21.97% and +0.04%, respectively.

Investors might also notice recent changes to analyst estimates for FDX. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. FDX currently has a Zacks Rank of #4 (Sell).

Digging into valuation, FDX currently has a Forward P/E ratio of 13.48. Its industry sports an average Forward P/E of 12.16, so we one might conclude that FDX is trading at a premium comparatively.

Investors should also note that FDX has a PEG ratio of 1.12 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. FDX's industry had an average PEG ratio of 1.51 as of yesterday's close.

The Transportation - Air Freight and Cargo industry is part of the Transportation sector. This group has a Zacks Industry Rank of 67, putting it in the top 27% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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