7 Companies to Post Big Profit Gains

FedEx (FDX), the second-largest package-delivery company, is the world's biggest express-delivery firm, and derives two-thirds of its revenue from its express division.

The company said two weeks ago that it carried record domestic and international volume in the fiscal third quarter ended Feb. 28, and that its loss-making domestic truck unit would return to profit by June. For its fiscal fourth quarter, traditionally the company's strongest, FedEx predicted earnings of $1.66 to $1.83 per share, topping analysts' consensus forecasts of $1.65 per share.

Improving volumes are allowing FedEx to charge higher rates to new customers and raise rates as contracts with current customers come up for renewal, FedEx said.

According to TheStreet's survey of analysts, they give FedEx 17 "strong buy" ratings, three "moderate buys" and four "holds."

Standard & Poor's gives the shares a "buy" recommendation and the company a top five-star rating. It put a 12-month $113 price target on its shares now trading at $90.28.

S&P said in its review of the company that "we think that an improving U.S. and global economy is likely to lead to increased volumes across FedEx's entire network, and improved capacity utilization should drive margin expansion in fiscal 2011 and fiscal 2012. We believe the shares will benefit from increased investor interest in logistics stocks on concrete signs of economic improvement."

Its shares are up only 0.1% this year and 2.4% over the past year, giving the company a market value of $28 billion.

>>To see these stocks in action, visit the 7 Companies to Post Big Profit Gains portfolio on Stockpickr.

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