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FedEx (FDX) Soars 6.1%: Is Further Upside Left in the Stock?

·2 min read
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FedEx (FDX) shares rallied 6.1% in the last trading session to close at $279.58. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 3.1% gain over the past four weeks.

The upside was owing to the better-than-expected third-quarter fiscal 2021 (ended Feb 28, 2021) earnings report announced by the transportation company. It delivered earnings of (excluding 17 cents from non-recurring items) $3.47 per share, which surpassed the Zacks Consensus Estimate of $3.21. Quarterly revenues of $21,510 million outperformed the Zacks Consensus Estimate of $19,970.9 million and also increased 23% year over year. Results were aided by strong volume growth in U.S. domestic residential package amid the ongoing COVID-19 pandemic. Further, with the gradual resumption of economic activities, the company expects solid earnings growth in the fiscal fourth quarter.

Price and Consensus

Price Consensus Chart for FDX
Price Consensus Chart for FDX

This package delivery company is expected to post quarterly earnings of $4.48 per share in its upcoming report, which represents a year-over-year change of +77.1%. Revenues are expected to be $19.53 billion, up 12.5% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For FedEx, the consensus EPS estimate for the quarter has been revised 1.3% higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on FDX going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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