FedEx Q2 Earnings Preview: Analyst Estimates, Concerns On Macro, Stock Outperforming UPS And More
Portfolio Pulse from Chris Katje
FedEx Corp (NYSE:FDX) is expected to report Q2 revenue of $22.405 billion, a potential decline from the previous year's $22.814 billion. Analysts predict EPS of $4.20, up from $3.18 year-over-year. Despite six quarters of missing revenue estimates, FedEx has outperformed EPS estimates for five consecutive quarters. Morgan Stanley's analyst sees a potential miss across all segments, while a Citi analyst views FedEx as a top pick, citing cost initiatives and a potential Cyber Week boost. FedEx's performance will be compared to UPS's recent revenue decline and guidance cut. FedEx shares have risen 60% YTD, outperforming UPS's 7% decline. Amazon's emergence as the largest U.S. residential parcel delivery company is also noteworthy.
December 18, 2023 | 8:09 pm
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NEGATIVE IMPACT
UPS's recent revenue decline and guidance cut will be contrasted with FedEx's results. FedEx's outperformance in stock price compared to UPS could be affected by the upcoming earnings report.
UPS has already reported a revenue decline and lowered guidance, which sets a precedent that could negatively impact investor sentiment for UPS if FedEx reports better results or market share gains.
CONFIDENCE 70
IMPORTANCE 75
RELEVANCE 70
NEUTRAL IMPACT
Amazon's new status as the largest U.S. residential parcel delivery company could impact FedEx and UPS. FedEx's severed ties with Amazon in 2019 may mitigate direct impact, but market dynamics could still influence investor perception.
Amazon's position as the top U.S. residential parcel delivery company introduces competitive pressures for FedEx and UPS. However, FedEx's prior decision to end its relationship with Amazon may lessen the direct impact on its business.
CONFIDENCE 70
IMPORTANCE 60
RELEVANCE 50
NEUTRAL IMPACT
FedEx is anticipated to report a slight decline in Q2 revenue but an increase in EPS. Mixed analyst views and comparison to UPS's performance could influence the stock. The company's cost initiatives and holiday demand are key factors.
While FedEx is expected to report a decline in revenue, the anticipated increase in EPS and positive analyst sentiment from Citi could balance the impact on the stock price. The stock's strong YTD performance suggests investor confidence, but the mixed analyst outlook and comparison to UPS may create uncertainty.
CONFIDENCE 80
IMPORTANCE 90
RELEVANCE 100