Will FedEx (FDX) Stock Be Helped by FTC's Approval of TNT Acquisition? - TheStreet

NEW YORK (TheStreet) -- Fedex  (FDX) - Get Report stock is declining by 0.15% to $163.19 in after-hours trading on Tuesday, after the company received U.S. regulatory approval to acquire TNT Express.

The Federal Trade Commission approved the merger on Tuesday, Reuters reports.

The Memphis-based package delivery company announced earlier this year that it was buying TNT, a Dutch delivery service, for $4.8 billion. 

The European Union still has to approve the deal, Reuters reports. The offer is expected to close in the first half of 2016, FedEx said in October. 

Separately, TheStreet Ratings team rates FEDEX CORP as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

We rate FEDEX CORP (FDX) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, good cash flow from operations, increase in net income and growth in earnings per share. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • FDX's revenue growth has slightly outpaced the industry average of 2.1%. Since the same quarter one year prior, revenues slightly increased by 5.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.47, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, FDX has a quick ratio of 1.57, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Air Freight & Logistics industry average. The net income increased by 6.0% when compared to the same quarter one year prior, going from $653.00 million to $692.00 million.
  • Net operating cash flow has increased to $1,241.00 million or 26.37% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 2.05%.
  • FEDEX CORP has improved earnings per share by 7.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, FEDEX CORP reported lower earnings of $3.58 versus $6.79 in the prior year. This year, the market expects an improvement in earnings ($10.67 versus $3.58).
  • You can view the full analysis from the report here: FDX

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.