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FedEx (FDX) Up 121.6% in the Past 6 Months: More Upside Left?
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FedEx Corporation (FDX - Free Report) is having a dream run on the bourse of late as its shares have skyrocketed 121.6% over the past six months. The rally has resulted in the stock outperforming its industry’s highly impressive 96.3% appreciation during the same time frame.
Let’s analyze the reasons for this price upsurge and check if there is further room to run.
FedEx is being aided by the upturn in e-commerce demand during the coronavirus-ravaged times. Revenues at the FedEx Ground segment, which handles e-commerce deliveries for many retailers, have been on the upswing for a while now. Residential volumes are also expanding with most people placing on-line orders. Ground volumes are being aided by a shift from commercial business-to-business to the business-to-consumer pattern.
We are also pleased with the company’s efforts to reward its shareholders even in these difficult times. Notably, its dividends increased, seeing a 5-year CAGR of 26%. This reflects FedEx's shareholder-friendly approach. The company's cash position is solid too. Notably, FedEx exited the first quarter of fiscal 2021 with cash and cash equivalents of $6,954 million, way above the debt load (current portion) of $87 million. This underlines the company’s sufficient liquidity to meet its current debt obligations.
With the pandemic showing little signs of subsiding, e-commerce demand is likely to continue soaring in the near term. This bodes well for FedEx. Additionally, the current holiday season should add an impetus to the company’s prospects.
Northward Earnings Estimates
The Zacks Consensus Estimate for current-quarter earnings has been revised 72.7% upward over the past 90 days. For fiscal 2021, the consensus mark for the metric has moved 49.5% north in the same time frame. The favorable estimate revisions instill investor confidence in the stock.
Given the wealth of information at their disposal, it is in the best interest of investors to be guided by a broker’s expert advice and the direction of their estimate revisions. This is because the same serves as a key indicator in determining a stock price.
Shares of Knight-Swift, ArcBest and UPS have gained more than 1%, 90% and 70%, respectively, over the past six months.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Shutterstock
FedEx (FDX) Up 121.6% in the Past 6 Months: More Upside Left?
FedEx Corporation (FDX - Free Report) is having a dream run on the bourse of late as its shares have skyrocketed 121.6% over the past six months. The rally has resulted in the stock outperforming its industry’s highly impressive 96.3% appreciation during the same time frame.
Let’s analyze the reasons for this price upsurge and check if there is further room to run.
FedEx is being aided by the upturn in e-commerce demand during the coronavirus-ravaged times. Revenues at the FedEx Ground segment, which handles e-commerce deliveries for many retailers, have been on the upswing for a while now. Residential volumes are also expanding with most people placing on-line orders. Ground volumes are being aided by a shift from commercial business-to-business to the business-to-consumer pattern.
We are also pleased with the company’s efforts to reward its shareholders even in these difficult times. Notably, its dividends increased, seeing a 5-year CAGR of 26%. This reflects FedEx's shareholder-friendly approach. The company's cash position is solid too. Notably, FedEx exited the first quarter of fiscal 2021 with cash and cash equivalents of $6,954 million, way above the debt load (current portion) of $87 million. This underlines the company’s sufficient liquidity to meet its current debt obligations.
With the pandemic showing little signs of subsiding, e-commerce demand is likely to continue soaring in the near term. This bodes well for FedEx. Additionally, the current holiday season should add an impetus to the company’s prospects.
Northward Earnings Estimates
The Zacks Consensus Estimate for current-quarter earnings has been revised 72.7% upward over the past 90 days. For fiscal 2021, the consensus mark for the metric has moved 49.5% north in the same time frame. The favorable estimate revisions instill investor confidence in the stock.
Given the wealth of information at their disposal, it is in the best interest of investors to be guided by a broker’s expert advice and the direction of their estimate revisions. This is because the same serves as a key indicator in determining a stock price.
Zacks Rank & Other Stocks to Consider
FedEx currently carries a Zacks Rank #2 (Buy). Investors interested in the Zacks Transportation sector may also consider Knight-Swift Transportation Holdings Inc. (KNX - Free Report) , ArcBest Corporation (ARCB - Free Report) and United Parcel Service (UPS - Free Report) , each presently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Knight-Swift, ArcBest and UPS have gained more than 1%, 90% and 70%, respectively, over the past six months.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>