S&P Capital IQ analyst Jim Corridore reiterated a strong buy on FedEx shares on Tuesday and said stronger-than-expected demand for the new devices, leading to supply shortages, could benefit near-term FDX revenue.
"FedEx is one of the big facilitators of bringing iPhones from Asia," Corridore said, in an interview. "Certainly with the shortages, the need for express transportation will be even more urgent. New technology introductions don't come all the time, so this is a catalyst for the near-term."
FedEx shares have fallen about 5% since their opening on Sept. 17, the day before the shipper reported disappointing earnings for the fiscal first quarter, which ended Aug. 31."Earnings for the first quarter were below our expectations as weak global economic conditions dampened revenue growth, drove a shift by our customers to our deferred services and outpaced our near-term ability to reduce FedEx Express operating costs to match demand levels," said Chief Financial Officer Alan Graf, in the earnings release. FDX also reduced full-year guidance to between $6.20 and $6.50 a share. In his Tuesday report, Corridore reiterated his full-year guidance of $6.50 a share and his target price of $122, 19 times his full-year estimate. He also raised his fiscal year 2014 estimate to $8.02 a share citing "improved demand next year." "FDX is expected to unveil a new cost savings program at its investors meeting on October 9 and 10," Corridore wrote. "We think it should be able to improve operating margins with cost cuts and more efficient use of assets." In late morning trading Tuesday, FedEx shares were up 25 cents to $85.41. The shares started the year at $85.47. Follow @tedreednc -- Written by Ted Reed in Charlotte, N.C. >To contact the writer of this article, click here: Ted Reed
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV