To The Moon

$FedEx(FDX)$ is expected to release earnings on 25 June 2024 after the market closes (AMC).

Earlier in June 2024, FedEx increased its dividend by 9.5% and announced plans to cut up to 2,000 jobs in Europe. The company also reinstated international priority inbound and outbound services in Ukraine after a two-year suspension.

Despite being marginally lower so far in 2024, we have seen the rating for FedEx remain at Hold, but we need to note that FedEx has been underperforming the S&P 500 this year due to a slowing global economy, higher costs, and declining shipping volumes.

One good thing to note is that FedEx is now trading near the lower end of its historical valuation range, trading at a forward P/E ratio under 12x, which could potentially lead to significant margin expansion.

Market is expecting an EPS estimates consensus at $5.34 and the consensus revenue estimates is expected to be at $22.08 billion.

Fedex (FDX) Last Earnings Report

FDX last reported earnings on 21 March 2024 after the market close (AMC). FDX shares gained +7.4% the day following the earnings announcement to close at 284.32. Following its earnings release, 94 days ago, FDX stock has drifted -10.8% lower.

From the time it announced earnings, FDX traded in a range between 242.92 and 290.87. The last price (253.66) is closer to the lower end of range.

Implied Straddle for Upcoming Earnings is 7.2%. We might be seeing Fedex gathering a positive price effect, but the gains might be not more than 5%.

Fedex (FDX) Option Volatility Skew

Option volatility skew shows the implied volatility of options across different strike prices. FDX has an average implied volatility of 65.64% for options expiring 28 June 2024 (5 days).

Fedex (FDX) KDJ Show Potential Upside Despite Sideway Trading Recently

We have been seeing FDX trading sideways since last week of May 2024, and we have not see the stock price traded above the $253.66 level.

Is this due to the concern after the company announced dividend by 9.5% earlier and also plans to cut up to 2,000 jobs in Europe. But I personally would think that Fedex earnings should pick after their cost cutting exercise.

Investors should look out for how much could have been saved in its operating expenses in the midst of challenging geopolitical condition affecting Fedex business.

Summary

I would think it would be better to watch the price action for FedEx today to have a feel of whether investors are buying into FedEx efforts in cost cutting amidst lower shipping volume due to slower global economy.

Appreciate if you could share your thoughts in the comment section whether you think FedEx would be able to produce a better-than-expected earnings due to efforts on cost cutting to bring down its expenses?

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.