FedEx Corporation Stock Buy Recommendation Reiterated (FDX)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- FedEx Corporation (NYSE: FDX) has been reiterated by TheStreet Ratings as a buy with a ratings score of A . 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, reasonable valuation levels, good cash flow from operations and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.

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Highlights from the ratings report include:
  • FDX's revenue growth has slightly outpaced the industry average of 3.6%. Since the same quarter one year prior, revenues slightly increased by 3.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • FDX's debt-to-equity ratio is very low at 0.14 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, FDX has a quick ratio of 1.63, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has increased to $1,258.00 million or 48.17% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 28.75%.
  • The change in net income from the same quarter one year ago has significantly exceeded that of the Air Freight & Logistics industry average, but is less than that of the S&P 500. The net income has significantly decreased by 30.7% when compared to the same quarter one year ago, falling from $521.00 million to $361.00 million.

FedEx Corporation provides transportation, e-commerce, and business services in the United States and internationally. It operates in four segments: FedEx Express, FedEx Ground, FedEx Freight, and FedEx Services. FedEx has a market cap of $31.21 billion and is part of the services sector and transportation industry. The company has a P/E ratio of 17.2, below the S&P 500 P/E ratio of 17.7. Shares are up 5.8% year to date as of the close of trading on Monday.

You can view the full FedEx Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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