Should You Buy The Dip In FedEx Stock?

On December 19th, the company announced that operations to transport Moderna, Inc.’s (MRNA) COVID-19 vaccines for McKesson Corp. across the United States, are in motion. The company is also set to begin vaccine shipments throughout Canada and is preparing to begin delivering vaccines to other countries. This will help FDX meet the increased demands for residential delivery using its diverse network and expertise.

On December 15th, FDX and the world’s largest express transportation company announced the delivery of the first ATR 72-600F aircraft to its feeder aircraft network. This will allow FDX to expand its global footprint while serving more customers in locations that aren’t always accessible by their larger jet fleet.

Buy & Hold Grade: B

In terms of proximity to its 52-week high, which is a key factor that our Buy & Hold Grade takes into account, FDX is well-positioned. The stock is currently trading 11.4% below its 52-week high of $305.66, which it hit on December 9th.

The company’s net revenue grew at a CAGR of 6.2% over the past three years. This can be attributable to the company’s strong global express network and volume growth in International Priority and US domestic residential package services.

Peer Grade: C

FDX is currently ranked #5 out of 9 stocks in the Air Freight & Shipping Services industry. Other popular stocks in this industry are United Parcel Services, Inc. (UPS), Expeditors International of Washington, Inc.  (EXPD), and Hub Group, Inc. (HUBG)

UPS, EXPD, and HUBG gained 45.2%, 23.2%, and 12.1% over the past year, respectively. This compares to FDX’s 78.5% returns over this period.

Industry Rank: B

The Air Freight & Shipping Services industry is ranked #53 out of the 123 industries. The companies in this industry are involved in the shipping of domestic and international packages. They also offer international trade services specializing in customs brokerage, and ocean and air freight forwarding services. A sustained surge in e-commerce has increased the shipping volume in both the domestic as well as international markets.

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