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FedEx (FDX) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

FedEx (FDX) closed at $158.31 in the latest trading session, marking a +1.48% move from the prior day. This move outpaced the S&P 500's daily gain of 1.21%. Elsewhere, the Dow gained 0.97%, while the tech-heavy Nasdaq added 1.35%.

Prior to today's trading, shares of the package delivery company had lost 5.67% over the past month. This has was narrower than the Transportation sector's loss of 6.53% and lagged the S&P 500's loss of 3.6% in that time.

Investors will be hoping for strength from FDX as it approaches its next earnings release, which is expected to be September 17, 2019. On that day, FDX is projected to report earnings of $3.20 per share, which would represent a year-over-year decline of 7.51%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $17.14 billion, up 0.49% from the year-ago period.

FDX's full-year Zacks Consensus Estimates are calling for earnings of $14.61 per share and revenue of $71.10 billion. These results would represent year-over-year changes of -5.86% and +2.02%, respectively.

Investors should also note any recent changes to analyst estimates for FDX. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. FDX is currently a Zacks Rank #4 (Sell).

Digging into valuation, FDX currently has a Forward P/E ratio of 10.68. For comparison, its industry has an average Forward P/E of 10.68, which means FDX is trading at a no noticeable deviation to the group.

Investors should also note that FDX has a PEG ratio of 0.84 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. Transportation - Air Freight and Cargo stocks are, on average, holding a PEG ratio of 1.3 based on yesterday's closing prices.

The Transportation - Air Freight and Cargo industry is part of the Transportation sector. This group has a Zacks Industry Rank of 205, putting it in the bottom 20% 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.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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