FedEx Corporation (NYSE: FDX) has confirmed the release date for fiscal Q2 2022 earnings results which will be Thursday, December 16, 2021, after markets close.
What to look for
The global delivery company is ready to grow, and the expansion of its reach in the e-commerce sectors during the pandemic helped its growth. However, the stock is a victim of its success, and currently, the company faces short-term headwinds due to supply chain disruptions and rising labor costs.
Earnings: Stockearning’s Estimated EPS for fiscal Q2 2022 is expected to be better than the EPS of $4.37 reported in the first quarter. In the second quarter of fiscal 2021, the company reported EPS of $4.83. Historical EPS performance shows that the company has in the last 12 quarters beat estimates five times (41%) and missed seven times (58%). For the full year, the company expects EPS of between $18.25 and $19.5 before market-to-market retirement plan accounting adjustments.
Revenue: In the first quarter, the company had revenue of $22 billion compared to $19.3 billion a year before. The company increased its rates for 2022, which will start reflecting the company's revenue from January 2022.
Stock Movement: Since the last earnings release, FedEx stock has lost 4.5%. FedEx shares have been UP 24 times out of the past 47 quarters following the earnings release. So, the historical price reaction suggests a 51% probability of the share price going UP once FedEx reports fiscal Q2 2022 earnings. According to the Stockearning algorithm, the predicted first-day move is 4%, while the predicted move on the seventh day is 5%.
What analysts are saying
JPMorgan analyst Brian Ossenbeck is “constructive” on the stock ahead of its fiscal Q2 2022 results. Ossenbeck told investors that after the stock lost momentum following a brief rally, the stock is currently trading at an almost record valuation discount to UPS, offering a "decent margin of safety on relative basis." The analyst said that the largest risk is labor access and the ability of the management to forecast growing labor costs following its recent guidance. Ossenbeck stated that the company is tracing wee loin the recruitment plan based on the falling number of online job postings in the US that were down 23% from the peak in early November. Ossenbeck reiterated his “Buy” rating on the stock with a price target of $305.
Deutsche Bank analyst Amit Mehrotra downgraded UPS to “Hold” and placed a “Catalysts Call Buy” on FedEx shares as a near-term investment opportunity. Mehrotra believes “tailwinds” in fiscal Q2 2022 will be well received with increasing optimism among FedEx leadership that they will attain full-year guidance.
Also, Citi analyst Christian Wetherbee lowered his 2H 2022 earnings estimates on the company as he thinks that operational and labor costs are likely to linger from Q1 2022 through fiscal Q2 2022. As a result, the analyst slashed his fiscal 2022 EPS prediction from $19.75 to $18.85 below the lower end of the management’s target range guidance of $19.75 to $21. Nevertheless, Wetherbee maintained a “buy” rating on the stock with a price target of $300.
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