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

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FedEx (FDX) closed the most recent trading day at $233.27, moving -1.86% from the previous trading session. This move lagged the S&P 500's daily loss of 0.67%. Elsewhere, the Dow lost 1.23%, while the tech-heavy Nasdaq lost 0.05%.

Coming into today, shares of the package delivery company had gained 6.3% in the past month. In that same time, the Transportation sector gained 8.53%, while the S&P 500 gained 7.79%.

Investors will be hoping for strength from FedEx as it approaches its next earnings release. The company is expected to report EPS of $5.08, up 16.25% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $23.63 billion, up 7.41% from the year-ago period.

FDX's full-year Zacks Consensus Estimates are calling for earnings of $23.16 per share and revenue of $98.91 billion. These results would represent year-over-year changes of +12.37% and +5.77%, respectively.

Investors should also note any recent changes to analyst estimates for FedEx. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. FedEx is currently a Zacks Rank #3 (Hold).

Investors should also note FedEx's current valuation metrics, including its Forward P/E ratio of 10.27. Its industry sports an average Forward P/E of 15.25, so we one might conclude that FedEx is trading at a discount comparatively.

We can also see that FDX currently has a PEG ratio of 0.86. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Transportation - Air Freight and Cargo industry currently had an average PEG ratio of 1.47 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 166, putting it in the bottom 35% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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