FedEx (FDX) Stock Gaining After Credit Suisse Raises Earnings Estimates

NEW YORK (TheStreet) -- Shares of FedEx Corp. (FDX) are gaining 1.21% to $178.87 after Credit Suisse raised its 2016 earnings estimates to $10.91 from $10.89 per share, and 2017 earnings estimates to $12.56 from $12.54 per share.

The firm also introduced a fiscal year 2018 earnings forecast of $13.81 per share, according to the analyst note.

"The EPS guidance will be supported by continued improvement in base pricing and volume growth as well as further progress on the profit improvement plan (PIP)," Credit Suisse analysts said.

Within the context of a significantly underperforming transports sector, FedEx is one of the few stocks that offers insulation from broad-based commodities weakness, exposure to the consumer, and self-help via the PIP at Express, Credit Suisse added.

FedEx provides a portfolio of transportation, e-commerce, and a range of domestic and international shipping services for delivery of packages and freight under the FedEx brand.

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

"We rate FEDEX CORP (FDX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. 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, solid stock price performance, impressive record of earnings per share growth and compelling growth in net income. We feel its strengths outweigh the fact that the company shows low profit margins."

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

  • FDX's revenue growth has slightly outpaced the industry average of 0.5%. Since the same quarter one year prior, revenues slightly increased by 3.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The current debt-to-equity ratio, 0.45, 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 1.73, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Powered by its strong earnings growth of 63.41% and other important driving factors, this stock has surged by 29.58% over the past year, outperforming the rise in the S&P 500 Index during the same period. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • FEDEX CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, FEDEX CORP increased its bottom line by earning $6.79 versus $4.92 in the prior year. This year, the market expects an improvement in earnings ($8.94 versus $6.79).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Air Freight & Logistics industry. The net income increased by 53.4% when compared to the same quarter one year prior, rising from $378.00 million to $580.00 million.
  • You can view the full analysis from the report here: FDX Ratings Report

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