FedEx (FDX) Overcoming Structural Changes and Economic Headwinds Key To Earnings
$FedEx(FDX)$ is scheduled to report its quarterly earnings on Thursday (19 Sep) after the market close. Market consensus is expecting revenue of $21.99 billion for the 2nd consecutive quarter of YoY growth of 1%.
Last quarter, FedEx generated a consolidated operating margin of 8.6%, with Ground showing good volume and yield gains. FedEx is a cheap stock on a growth basis, with the 3-year average multiple ('25 to '27) of 12x currently.
Market expect FedEx to report quarterly earnings at $4.81 per share, up from $4.55 per share in the year-ago period.
FedEx (FDX) Price Target
Based on 17 Wall Street analysts offering 12 month price targets for FedEx in the last 3 months. The average price target is $322.80 with a high forecast of $359.00 and a low forecast of $215.00. The average price target represents a 8.56% change from the last price of $297.34.
But we need to look at whether FedEx stock price cheap now, which I will be showing you the intrinsic value for FedEx.
FedEx (FDX) Intrinsic Value Show Undervalued
The intrinsic value of one FDX stock under the Base Case scenario is 357.66 USD. Compared to the current market price of 297.34 USD, FedEx Corp is Undervalued by 17%.
The Intrinsic Value is calculated as the average of DCF and Relative values: DCF value : 333.53, Relative Value is 381.79.
This make FedEx a potential stock to buy in anticipation of a better earnings.
FedEx (FDX) Year-To-Date Returns
FedEx year to date returns on its stock price have been quite reasonable more than 15%, but I believe this quarter is time for FedEx to recover from previous quarter as the CEO strategy to cut costs and also some strategic planning should yield positive results.
I would be monitoring this stock but would not be taking a position in my portfolio.
FedEx (FDX) Technical (MACD and Multi-Timeframe)
From the technical, we are seeing potential bullish MACD crossover formed before its earnings and there is a strong uptrend from the multi-time frame.
I would think that FedEx should be able to enjoy the benefit of FOMC rate cut and also the positive results from its strategy to cut costs and putting things in place by their CEO.
Summary
I am expecting a positive updates from FedEx which should help to return investors confidence and hence sentiment to push the stock price higher. The current stock price should be undervalued enough for one to take a position in their portfolio.
Appreciate if you could share your thoughts in the comment section whether you think FedEx would be able to give a positive sentiment to investors from their strategic changes.
@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.
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