FedEx's Sell-Side Roundup: Outperform Ratings Across The Board
FedEx Corporation (NYSE: FDX) reported its fourth-quarter earnings on Tuesday after the close. While the company beat revenue and EPS estimates for Q4 fiscal 2017, those figures were temporarily overshadowed by disappointing guidance.
The stock dropped 1.5 percent after Wednesday’s open before recovering and rising 2 percent from Tuesday’s close.
Here’s a summary of some of Wall Street’s reactions to the report.
Credit Suisse: FedEx More Favorable Than UPS
Credit Suisse analyst Allison Landry reiterated an Outperform rating on FedEx shares with a price target raised from $225 to $237.
Landry believes the stock will take a short-term breather due to the combination of a lower tax rate contributing to EPS guidance, a hazy view of fiscal 2018 ground shipping margins and an unexpectedly high capital expenditure.
Competitor United Parcel Service, Inc. (NYSE: UPS) has undergone a multi-year upswing in capital expenditures though, contributing to the analyst’s belief that FedEx makes for a better buy should price pull back a bit.
BMO: ‘Focusing On Revenue Quality’
BMO Capital Markets analyst Fadi Chamoun reiterated an Outperform rating with a price target raised from $220 to $245.
Chamoun took a segmented approach to examining the earnings report, noting that the 3-percent volume growth in the ground segment fueled stronger-than-expected results in the package segment.
The analyst also highlighted the freight segment’s slight beat compared to BMO’s estimate, despite volume falling short.
Oppenheimer: Beats On All Fronts
Oppenheimer’s Scott Schneeberger reiterated an Outperform rating and price target of $229.
Schneeberger highlighted the degree to which FedEx beat their estimates. “Each segment exceeded our [fiscal 2017 Q4] revenue estimates, and met/topped our [Q4] adjusted operating income estimates.
Most significantly, the company’s adjusted EPS of $4.25 beat Oppenheimer’s predicted $3.79, leading Schneeberger to say his annual EPS estimate of $13.67 may be too conservative.
UBS: ‘Solid EPS Growth Story Remains On Track’
UBS analyst Thomas Wadewitz reiterated an Outperform rating with a price target raised from $215 to $235.
Wadewitz commented on many of the same points, but placed emphasis on Express and TNT being future drivers of EPS growth in fiscal 2018. While investment in Express has raised capital expenditures, the analyst expects it to perform well, and TNT synergies will serve as a catalyst for EPS and share price.
He also noted that Amazon.com, Inc. (NASDAQ: AMZN) is unlikely to compete with FedEx or UPS in the small package space in the next few years, and will harm sentiment more than EPS.
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Latest Ratings for FDX
Apr 2017 | Loop Capital | Initiates Coverage On | Buy | |
Mar 2017 | BMO Capital | Upgrades | Market Perform | Outperform |
Feb 2017 | Raymond James | Upgrades | Market Perform | Outperform |
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