This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

FedEx Analysts Look for Beat

MEMPHIS, Tenn. ( TheStreet) -- FedEx (FDX - Get Report) is having a good holiday season with improved volumes and a favorable court ruling, but the company is facing mixed expectations as it prepares report earnings on Thursday.

Several analysts expect FedEx to beat earnings estimates, but their expectations for the stock are tempered by expectations of conservative guidance.
Fed Ex

Analysts surveyed by Thomson Reuters expect earnings of $1.31 for the fiscal second quarter ending Nov. 30, of $5.21 for fiscal 2011 ending May 30 and of $6.22 for fiscal 2012 ending in May 2012. At mid-morning Wednesday, shares were trading at $93.03, down 30 cents.

In a recent report Morgan Stanley analyst William Greene said he expects $1.37 for the quarter. He said "at 15 times consensus F2012 EPS, FDX is not expensive in historical terms." But he noted "we struggle to recommend the stock as investors may need to wait until [late in the fourth fiscal quarter] or later when cost headwinds clear before the street comes to our view."

"Guidance could disappoint," Greene added, particularly in light of rising fuel costs and the seasonal weakness of the current quarter. Consensus estimate for the current quarter is $1.10 -- but Greene is at $1.

Avondale Partners analyst Don Broughton estimates $1.37 in the second quarter, the highest among 21 estimates. (The lowest is $1.22.) Broughton said his view is based on gains in volume and in pricing for international express and domestic ground. However, given rising fuel prices, he lowered his fiscal year 2011 estimate to $5.35, which is still ahead of the company's latest guidance to EPS between $4.80 and $5.20.

Goldman Sachs analyst Scott Malat also expects FedEx to beat earnings. In a recent report, Malat estimated $1.36 a share and raised his 12-month price target to $100 from $95. "We expect the upside to be driven by strong volume trends and domestic pricing growth," he said.

But like Greene, Malat questions the immediate future for the stock. He said "management has in the past provided targets below Street expectations," while a strong 2010 third quarter will make for a tough comparison.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
FDX $171.13 0.78%
UPS $97.20 0.27%
AAPL $126.44 -0.13%
FB $87.28 0.43%
GOOG $523.40 0.30%

Markets

DOW 17,730.11 -27.80 -0.16%
S&P 500 2,076.78 -0.64 -0.03%
NASDAQ 5,009.2140 -3.9090 -0.08%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs