We recently issued an updated report on FedEx Corporation FDX.
FedEx's fourth-quarter fiscal 2020 results were aided by increase in e-commerce sales during the COVID-19 pandemic. The need for door-to-door delivery of essentials is rising thanks to pandemic-induced social-distancing protocols, quarantine and lockdowns. Notably, FedEx Ground revenues have surged 20% year over year in fourth-quarter fiscal 2020 owing to residential delivery volume growth. Higher Ground revenues are partly offsetting the coronavirus-related adversities.
To combat the COVID-19 related headwinds, the company has undertaken several cost-reduction initiatives including temporary workforce reductions, deferring non-essential investments and reducing discretionary spending. For fiscal 2021, the company anticipates capital expenditures of approximately $4.9 billion, which indicate a 17% decline from fiscal 2020 levels.
However, low commercial volumes due to large-scale business closures hurt FedEx's revenues in fourth-quarter fiscal 2020. With the pandemic continuing, the situation remains uncertain. Although commercial volumes have been improving since May, yet it is below year-ago levels.
FedEx Corporation Price
FedEx Corporation price | FedEx Corporation Quote
Persistent weakness in FedEx’s primary revenue generating segment, FedEx Express, is another concern. FedEx Express revenues have declined 5% year over year in fiscal 2020 due to 5% reduction in package revenues and 6% fall in freight revenues.
Zacks Rank & Key Picks
FedEx currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Transportation sector are Canadian Pacific Railway Limited CP, TFI International TFII and Teekay Tankers Ltd. TNK. All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings (three to five years) growth rate for Canadian Pacific, TFI International and Teekay Tankers is estimated at 7.5%, 4.1% and 3%, respectively
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
FedEx Corporation (FDX) : Free Stock Analysis Report
Canadian Pacific Railway Limited (CP) : Free Stock Analysis Report
Teekay Tankers Ltd. (TNK) : Free Stock Analysis Report
TFI International Inc. (TFII) : Free Stock Analysis Report
To read this article on Zacks.com click here.