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

Zacks Equity Research

FedEx (FDX) closed the most recent trading day at $160.66, moving -0.33% from the previous trading session. This move lagged the S&P 500's daily gain of 0.08%. Meanwhile, the Dow lost 0.09%, and the Nasdaq, a tech-heavy index, added 0.38%.

Prior to today's trading, shares of the package delivery company had gained 1.26% over the past month. This has outpaced the Transportation sector's loss of 2.84% and the S&P 500's loss of 3.57% in that time.

Investors will be hoping for strength from FDX as it approaches its next earnings release. The company is expected to report EPS of $3.20, down 7.51% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $17.14 billion, up 0.49% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $14.61 per share and revenue of $71.10 billion. These totals would mark changes of -5.86% and +2.02%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for FDX. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an 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. Within the past 30 days, our consensus EPS projection remained stagnant. FDX is currently a Zacks Rank #4 (Sell).

Digging into valuation, FDX currently has a Forward P/E ratio of 11.04. For comparison, its industry has an average Forward P/E of 11.04, which means FDX is trading at a no noticeable deviation to the group.

Investors should also note that FDX has a PEG ratio of 0.87 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Transportation - Air Freight and Cargo industry currently had an average PEG ratio of 1.31 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 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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