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FedEx (FDX) Expects 10% Uptick in Holiday Package Deliveries

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·2 min read
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  • FDX
  • CHRW
  • UPS

Per a Bloomberg report, FedEx FDX expects a 10% year-over-year rise in holiday package volumes this year. Despite the economy reopening as opposed to last year, online shopping continues to be a favorite among consumers.

Even compared with the 2019 (pre-coronavirus) scenario, FedEx, currently carrying a Zacks Rank #4 (Sell), expects to deliver 100 million more packages during the peak season (which starts November-end following the U.S. Thanksgiving holiday) this year. FDX aims to deliver 32 million packages on Cyber Monday (Nov 29), which will likely be the busiest day.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Cyber Monday apart, the other busiest days for the peak season will be the current month’s last Tuesday and the first two Mondays in December. The phenomenal e-commerce growth rate during the pandemic is a huge boon for FedEx, which invested significantly in response to exponential e-commerce growth.

FedEx’s rival United Parcel Service UPS, which currently carries a Zacks Rank #3 (Hold), also benefits from the e-commerce boom. Akin to the last few quarters, upbeat e-commerce demand boosted UPS' third-quarter 2021 results as well.

UPS raised shipping prices on the back of higher adoption of e-commerce. The holiday season should aid UPS further, which lifted its 2021 adjusted operating margin target to about 13% from 12.7%, anticipating solid sales in the holiday season.

A Transportation Stock Worth Considering

A better-ranked stock in the broader Zacks Transportation sector is C.H. Robinson Worldwide (CHRW).

Long-term expected earnings per share (three to five years) growth rate for C.H. Robinson is pegged at 9%. CHRW benefits from higher pricing and volumes across most of its service lines. Total revenues jumped 42.4% year over year in the first nine months of 2021 with higher revenues across all segments.

CHRW’s measures to reward its shareholders are encouraging. Driven by the tailwinds, the stock has gained almost 6% in the past three months. Moreover, the Zacks Consensus Estimate for current-year earnings has been revised 17.4% upward over the past 60 days. C.H. Robinson currently sports a Zacks Rank #1.

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FedEx Corporation (FDX) : Free Stock Analysis Report
United Parcel Service, Inc. (UPS) : Free Stock Analysis Report
C.H. Robinson Worldwide, Inc. (CHRW) : Free Stock Analysis Report
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