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FedEx Crushes Q4 Earnings Estimates, Stock Up 10%

Ambrish Shah - Author

Jul. 1 2020, Published 10:19 a.m. ET

FedEx (NYSE:FDX) stock rose 10% in pre-market trading at 6:16 AM ET today. On Tuesday, the company reported its strong results for the fourth quarter of fiscal 2020, which ended May 31. The company reported higher-than-expected fourth-quarter results. FedEx’s fourth-quarter revenues and earnings beat Wall Street analysts’ estimates.

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FedEx’s Q4 results

In the fourth quarter, FedEx reported an adjusted EPS of $2.53 compared to $5.01 in the fourth quarter of fiscal 2019. The adjusted earnings beat analysts’ consensus expectation of $1.52 per share. FedEx generated sales of $17.4 billion—a reduction of 2.5% from the same quarter a year ago. The shipping company beat analysts’ consensus revenue expectation of $16.4 billion. FedEx reported a rise of $125 million in operating costs associated with the COVID-19 pandemic.

In the fourth-quarter earnings release, FedEx CEO Frederick W. Smith said, “Though our fiscal fourth quarter performance was severely affected by the COVID-19 pandemic, I am extremely proud of the herculean efforts of our team members.” Smith also said, “With safety as the first priority, these men and women provided essential transportation of critical supplies across the globe and delivered peak-level e-commerce volumes in the United States. As a result of the strategic investments we have made to enhance our capabilities and efficiencies, FedEx is well positioned to support and benefit from the reopening of the global economy.”

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Wall Street analysts expect FedEx to report an adjusted EPS of $2.23 on revenue of $17.2 billion in the first quarter of fiscal 2021. Analysts also expect FedEx’s revenues to rise by 2.2% YoY (year-over-year) in fiscal 2021 to $70.7 billion. The sales could rise by 5.6% YoY in fiscal 2022 to $74.8 billion. Meanwhile, the adjusted earnings will likely rise by 7.3% YoY in fiscal 2021 to $10.19 per share. However, the profits could rise by 21.8% YoY to $12.41 per share in fiscal 2022.

Analysts’ recommendations and target price

Among the 28 analysts tracking FedEx stock, 15 recommend a “buy,” 12 recommend a “hold,” and one recommends a “sell.” Wall Street analysts’ mean target price on the stock is $161.80, which implies a 15.4% gain from the current level of $140.22. The consensus target price for the stock has risen from $139.63 in June—a growth of 15.9%.

Many analysts revised their target price for FedEx stock after its fourth-quarter earnings report.

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  • J.P. Morgan upgraded the stock from “neutral” to “overweight” and increased its target price from $145 to $188.
  • Cowen and Company increased its target price from $156 to $167.
  • Baird increased its target price from $140 to $162.
  • Credit Suisse increased its target price from $150 to $171.
  • Wells Fargo increased its target price from $153 to $179.
  • Citigroup increased its target price from $160 to $170.
  • Stephens increased its target price from $160 to $180.
  • BMO increased its target price from $130 to $150.
  • Susquehanna increased its target price from $140 to $162.
  • Raymond James increased its target price from $150 to $165.
  • UBS increased its target price from $158 to $181.
  • Barclays increased its target price from $135 to $155.
  • Goldman Sachs increased its target price from $153 to $169.
  • Morgan Stanley increased its target price from $98 to $100.

Stock returns

FedEx stock rose 4.2% on Tuesday and ended the day at $140.22 with a market cap of $36.6 billion. Notably, the stock is trading 21.5% below its 52-week high of $178.50 and 58.1% above its 52-week low of $88.69. On a year-to-date basis, the stock has fallen by 7.3% as of Tuesday.

Based on the closing price on Tuesday, FedEx stock was trading 2.0% above its 20-day moving average of $137.45. The stock is also trading 10.1% above its 50-day moving average of $127.37 and 9.4% above its 100-day moving average of $128.15. FedEx’s 14-day relative strength index score is 58. The score suggests that the stock isn’t oversold or overbought.

FedEx has an upper Bollinger Band level of $146.71. The company’s middle Bollinger Band level is $137.45, while its lower Bollinger Band level is $128.18. On Tuesday, the stock closed near its middle Bollinger Band level, which shows that the stock is neutral.

On Tuesday, UPS (NYSE:UPS) and XPO Logistics (NYSE:XPO) stocks rose 1.6% and 2.6%, respectively. The S&P 500 and the Dow Jones Industrial Average rose 1.54% and 0.85%, respectively.

Read Will Fedex’s Q4 Results Help Its Stock Recover? to learn more.


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