Should You Buy The Dip In FedEx Stock?

NYSE: FDX | FedEx Corporation  News, Ratings, and Charts

Due to the boom in e-commerce sales, FedEx’s (FDX) shipping volumes are hitting record levels. The company is playing a crucial role in the distribution of COVID-19 vaccines. This won’t meaningfully affect its bottom-line but it symbolizes the company’s importance. Shares are down nearly 10% following its recent earnings report, should you buy the dip?.

FedEx Corporation (FDX - Get Rating) is a leading multinational delivery services company, operating through segments such as FedEx Ground segment, FedEx Express segment, and FedEx Freight segment. The company also offers FedEx Mobile, a suite of solutions to track packages, create shipping labels, view account-specific rate quotes, and access drop-off location information.

The number of packages being delivered across the country this year will likely hit record highs, due to the ongoing pandemic. As online shopping sales reach unprecedented levels amid the holiday season, FDX should witness stellar growth in revenue and earnings. Moreover, the company’s rigorous planning to transport COVID-19 vaccines globally, safely and on time, will give a substantial boost to its unmatched global network.

"SAFE HAVEN" Dividend Stocks for Turbulent Times

FDX’s broad portfolio of services and growth in the global delivery network has allowed it to gain 78.5% over the past year. This impressive performance combined with several other factors has helped FDX earn a “Buy” rating in our proprietary rating system. 

Here’s how our proprietary POWR Ratings system evaluates FDX:

Trade Grade: B

FDX is currently trading lower than its 50-day moving averages of $280.57, but higher than its 200-day moving average of $193.47, indicating that the stock is in a slight uptrend. Also, the stock gained 12.1% over the past three months, reflecting a short-term bullishness.

FDX’s revenue increased 19% year-over-year to $20.56 billion in the fiscal second quarter ended November 2020. The increase in revenue is primarily attributable to the significant increase in the services segment of the company. Operating income increased 164% from the year-ago value to $1.47 billion, while EPS rose 114% from the prior-year quarter to $4.55 over this period.

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