Following the announcement of its earnings report, FedEx Corporation (NYSE: FDX) experienced a notable rise in its share price during the after-market session on Tuesday. FDX stock surged by 13.89%, reaching $292.00 on the US stock charts, following an almost stable close during the regular session.
Financial Performance And DRIVE Program
For the fourth quarter ending May 31, FedEx (FDX) reported a modest revenue increase, climbing from $21.9 billion the previous year to $22.1 billion this year. Both operating income and margin showed improvement, a result of reduced structural costs as the company continued to implement its DRIVE program. Despite a difficult revenue environment, FedEx achieved notable progress in fiscal 2024, concluding the year with four consecutive quarters of growing operating income and margin.
These outcomes, which are noteworthy given the state of the economy, demonstrate FedEx’s continuous implementation of its DRIVE programs and its dedication to modernizing the business while offering top-notch customer care. FedEx plans to keep up this momentum through the 2025 fiscal year as it works to create the most adaptable, intelligent, and efficient network possible.
FedEx Small Business Grants Program
In addition to its financial performance, FedEx just revealed the winners of its 12th FedEx Small Business Grants Program. Out of approximately 3,900 submissions, 10 U.S.-based enterprises were chosen this year. The $50,000 main award went to Greenville, Rhode Island-based Bombi, while $20,000 went to nine other firms. FedEx is dedicated to giving small and medium-sized business owners the tools they need to succeed by giving them access to essential resources.
In addition, each grant recipient gets a $300 My FedEx Rewards voucher, a $500 print credit at FedEx Office, access to FedEx Premier Customer Care, a packaging consultation from the FedEx Packaging Lab, a digital and technology consultation from the FedEx Digital Sales Solutions team, a feature on the FedEx Small Business Center, and an invitation to attend a Small Business Strategic Insights Forum.
Nearly 80,000 companies have applied to the program in the US over the last twelve years, and FedEx has given out more than $2 million in grant money and printing credits overall since the program’s launch.
FedEx Corporation (NYSE: FDX) navigated a sluggish trajectory during regular trading hours on Thursday, modestly ascending by a mere 1.87% from its previous closing at $259.55 to $256. However, the landscape dramatically shifted in the early premarket hours, as eager investors propelled the stock skyward by an astounding 35%, breaching the coveted $300 threshold.
FedEx Corp. stands as a titan in the corporate realm, specializing in a comprehensive array of services spanning transportation, e-commerce facilitation, and bespoke business solutions. Its operational architecture encompasses distinct segments, including FedEx Express, FedEx Ground, FedEx Freight, FedEx Services, and Corporate, Other, and Eliminations.
Earnings Report Highlights
In a late Thursday revelation, FedEx Corporation disclosed adjusted earnings of $3.86 per diluted share for the fiscal 2024 third quarter, eclipsing analyst prognostications of $3.45 per share. This stellar performance ignited a fervent surge in after-hours trading, showcasing investor confidence in the company’s fiscal prowess.
Segmental Performance
Despite prevailing macroeconomic headwinds, FedEx Express, the aerial and international arm, showcased resilience with bolstered operating results, attributed to strategic efficiency enhancements and judicious cost containment measures. Parallelly, FedEx Ground reported amplified operating results buoyed by diminished structural overheads and enhanced revenue yields. Conversely, FedEx Freight grappled with subdued performance due to diminished fuel surcharges and a contraction in shipment volume.
Guidance and Strategic Imperatives
In a testament to its sanguine outlook, FedEx revised its full-year fiscal 2024 guidance, elevating the upper and lower echelons of its earnings projection to a range of $17.25 to $18.25 per share. This recalibration underscores the company’s unwavering commitment to realizing substantial cost savings of $1.8 billion through its transformative DRIVE program.
Share Repurchase Endeavor
A pivotal catalyst propelling the stock’s meteoric ascent was the announcement of a formidable $5 billion share repurchase program, duly authorized by the esteemed board of FedEx. This strategic maneuver, complemented by extant authorization, underscores the organization’s fervent dedication to augmenting shareholder value and fortifying its financial standing.
Conclusion
In summation, FedEx Corporation’s resounding after-hours surge serves as a testament to its indomitable resilience, underscored by an exceptional earnings report and strategic initiatives poised to propel the company towards sustained growth and prosperity.
The transportation seems much better this year and things are recovering gradually.
The transportation industry has mostly suffered during the course of the global pandemic. However, things eased off a bit by the late last year. Surprisingly, some companies from the transportation sector have seen massive growth since the pandemic hit. For instance, logistics companies have made huge bucks due to the rise in online orders.
So, transportation stocks hold a strong potential to pump with things getting normal in the coming time. Let’s have a look at the three top transportation stocks to watch for this year.
FedEx (FDX)
The logistics giant, FedEx (FDX) shares have recently been trading high. The analysts have mixed opinions on the multinational delivery services firm, but they are mostly bullish and rate the stock a buy of around $250. As we write this, FDX trades around $274.18. So, investors must keep an eye on the stock and go for buy on low.
FedEx reported Fiscal year third-quarter results that topped consensus estimates and reinstated guidance for the first time since the onset of the pandemic. Moreover, the balance sheet is also strong.
As of Dec. 2020, 63 hedge funds’ portfolios were holding the stock. While FDX’s all-time high is 71. The investors have seen a decline in hedge fund interest in the stock of FedEx. But in the middle of everything, there lies an opportunity to make profits. So, keep watching FDX.
Union Pacific (UNP)
Union Pacific (UNP) is a railroad stock that is quite attractive for dividend-based investors. UNP has an extensive network of tracks in the western two-thirds of the U.S. The company ships everything including coal, chemicals, crops, and cars, among others.
Union Pacific has good earnings prospects. The company is working on its expansion project which is set to open new ways in the future. TV host Jim Cramer has highlighted high-quality cyclical to buy on weakness. He mentioned UNP is among them and called the transporter “a one-stop-shop for the great reopening.” He added:
“If you knew the score, you could confidently buy [Union Pacific] into weakness because this market loves the reopening plays. I bet it’s got a lot more room to run.”
Kirby Corp. (KEX)
Kirby Corporation (KEX) is the largest tank barge operator in the United States, transporting bulk liquid products across the country and certain other regions including the West, East, and Gulf Coasts along with Alaska and Hawaii to deliver bulk liquids to customers.
Kirby’s Marines have been under the red zone and saw weak utilization during the fourth quarter of 2020. This is expected to improve gradually in the first quarter or maybe the second quarter and emerge as a strong business segment for the company later this year.
Things are anticipated to get better in the next two years or so and Kirby will be set on the path to pre-pandemic levels. Especially, the increase in chemical production capacity during the pandemic will help the company recover swiftly. So, Kirby (KEX) is one stock to keep under your radar.
On November 30, American stock indices closed in negative territory. The S&P 500 index fell 0.46% to 3622 points, the Dow Jones lost 0.91%, the NASDAQ fell 0.06%. The month ended with profit taking in cyclical sectors and capital flow into growth stocks. The tech sector looked strongest, adding 0.66%. The correction in the energy sector intensified amid the uncertainty surrounding the OPEC + meeting, and it lost 5.37%.
The agreement between Nikola (NKLA: -27%) and General Motors (GM: -2.7%) disappointed investors, as it does not include GM investments in Nikola’s business.
S&P Global (SPGI: + 3%) and UK-based IHS Markit (INFO: + 7.4%) have announced a share swap merger. The volume of the transaction will amount to $ 44 billion.
Currently, global stock exchanges are showing positive dynamics. On the eve, the final data on the effectiveness of the antikovid vaccine from Moderna, which was estimated at 94.1%, were presented. The company has applied for an emergency review of its drug with the FDA. After the close of the main session the day before, the American regulator set the date for the meeting of the special committee for December 17. Market participants are awaiting vaccine approval from both Moderna and Pfizer in December. In addition, they estimate that about 40 million doses, enough to inoculate 20 million people, will be available by the end of the year. This supports the positive sentiment in the markets. Note, however, that optimistic expectations regarding an early start of vaccination have been maintained since October, so their influence on the dynamics of trading is becoming more limited.
US Treasury Secretary Steven Mnuchin and Fed Chairman Jerome Powell will deliver their presentations to the Senate Banking Committee today. Mnuchin is expected to reiterate the proposal to channel $455 billion in unused funds under special lending programs for fiscal stimulus. It is not excluded that the hope that a small package of economic support will be adopted before the inauguration of the new president will again act as a factor of optimism. However, major disagreements between Democrats and Republicans remain on this issue.
Asian stock markets closed in the green. Japan’s Nikkei rose 1.34%, China’s CSI300 rose 1.60%, and Hong Kong’s Hang Seng climbed 0.86%. European indices are trading in positive territory. EuroStoxx 50 adds 1%.
Vague appetite for risk. The 10-year Treasury rate rises to 0.85%. Brent oil futures are rising above $ 48. Gold rises in price to $ 1790.
ISM Manufacturing PMI for November is due today. The indicator is expected to decrease from 59.3 in October to 58.0. The worsening epidemiological situation harms production to a much lesser extent than in the spring, since local restrictions apply only to the service sector.
Today Top Movers
NIO Limited (NIO) reported gain of +3.21% in premarket session on Tuesday after revealed its November 2020 delivery results.
Smart EV firm Xpeng Inc. (XPEV) is up +7.90% in early morning session on Tuesday following the declaration of its vehicle delivery results for November 2020.
In Tuesday’s pre-market session Hexo Corp (HEXO) surged +15.18% in its share price and the firm recently revealed that it will participate in the Cowen 2020 Boston Cannabis Conference on Wednesday, December 2, 2020.
Top Upgrades & Downgrades
Barclays turned bullish on FedEx Corporation (FDX) , upgrading the stock to ” Overweight” from “Equal-Weight ” and assigning a $360.0 price target.
Evercore Partners Inc (EVR) has won the favor of Keefe, Bruyette & Woods’s equity research team. The firm upgraded the shares from Market Perform to Outperform.
Earlier Tuesday B of A Securities its rating on BioNTech SE (NASDAQ:BNTX) stock to Neutral from Buy. With shares trading at around $126.63, the Wall Street firm thinks BioNTech ‘s stock could gain more than 1.92%.
Barclays analysts reduced their investment ratings, saying in research reports covered by the media that its rating for Appian Corp (APPN) has been changed to Underweight from Equal-Weight.
Analysts at RBC Capital downgraded IHS Markit Ltd. (INFO)’s stock to Sector Perform from Outperform on Tuesday.
Latest Insider Activity
Kandi Technologies Group Inc. (KNDI) Director Wang Lin announced the sale of shares taking place on Nov 25 at $15.00 for some 1,000 shares. The total came to more than $15000.0.
Slack Technologies Inc. (WORK) Chief Technology Officer Henderson Cal sold on Nov 25 a total 96,155 shares at $30.99 on average. The insider’s sale generated proceeds of almost $46485.0.
Onconova Therapeutics Inc. (ONTX) Chief Financial Officer Guerin Mark Patrick declared the purchase of shares taking place on Nov 27 at $0.26 for some 4,614 shares. The transaction amount was around $1200.0.
Coty Inc. (COTY) Director Singer Robert S bought on Nov 27 a total 362,482 shares at $6.80 on average. The purchase cost the insider an estimated $34,000.
Earnings To Watch Today
Top US earnings releases scheduled for today include Lufax Holding Ltd (NYSE:LU) . It will announce its Sep 2020 financial results. The company is expected to report earnings of $0.14 per share.
Analysts expect salesforce.com inc. (NYSE:CRM) to report a net income (adjusted) of $0.75 per share, when the bank releases its quarterly results shortly. Revenue for the fiscal quarter ended Oct 2020 is predicted to come in at $5.25B.
ReneSola Ltd (SOL) , is due to announce earnings after the market closes today. It expected to report revenues of $9.9M in recently concluded three-month period.
United Parcel Service, Inc (NYSE: UPS), a world’s largest package delivery company has held well through the pandemic but its share has tumbled down 4.68% after losing -7.76 on Thursday. UPS is known for its letter and package delivery, logistics, specialized transportation, and financial services. It delivers millions of packages around the world each day.
United Service Parcel is continuously improving its logistics and strives to give customers flexibility and security. UPS is now open for business and continue with daily pickup and deliveries. As the pandemic has disrupted the various businesses around the world, UPS has also experienced the shock but it held well and continues to deliver worldwide where permitted.
United Service Parcels’ main priority is to ensure the health and safety of its customers and workforce. It has implemented the constant monitoring of air and ground networks to address sources of disruption. COVID-19 has badly affected businesses like UPS but also increases the opportunities for many businesses as e-commerce growth increases.
Shares of United Parcel Service went down 4.68% as it lost -7.76 on Thursday. In the past 52-weeks of trading, this company’s stock has oscillated between the low of $82.00 and a high of $166.20. UPS has moved up 92.71% from its 52-weeks low and moved down -4.92% from its 52-weeks high. If we look at its profitability, it has a return on assets, equity, and investment of 7.50%, 106.20%, and 23.10%, respectively. United Parcel Service market capitalization has remained high, hitting $134.62 billion at the time of writing. Focusing on its liquidity, it has a current ratio of 1.20.
If we compare the sales of United Parcel Service of 2019 and 2020, it has generated $71.86 billion in sales. While in 2020 Q2, its sales rose 13% to $20.46 billion. Meanwhile, its earning increases by 9% to $2.13 per share. Its earnings beat analyst’s expectations because of increasing demand for e-commerce deliveries. United Parcel Service has spent more to adapt to e-commerce growth and implement new strategies that are helpful for the business.
United Parcel Service has a major role in the fight against the pandemic as the government around the world has labeled it as an essential service provider. It has earlier experienced the hit because of the transition in its management. Earlier this year, its COO Jim Barber has announced his plan to resign from his position in December 2019.
UPS’s main rival is FedEx but there are some major differences in their services. United Parcel Service’s main focus is retail customers and small businesses. They also offer some postal and shipping related services. UPS has a single pickup and delivery network and its competitive edge is its domestic ground delivery services. While its rival FedEx specialty is the rapid delivery of packages and time-sensitive mail. UPS stock is not currently providing a valid buy point.
