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We have recently updated a report on FedEx Corporation (FDX - Free Report) .
FedEx has an impressive Growth Score of A. This style score condenses all the essential metrics from the company’s financial statements to get a true sense of quality and sustainability of growth.
FedEx's liquidity position is solid. The company's current ratio, a measure of liquidity, was pegged at 1.39 at the end of the third quarter of fiscal 2022. A current ratio of more than 1 indicates that the company's assets will be able to cover its debts that are due at the end of the year. FDX exited the third quarter of fiscal 2022 with cash and equivalents of $6,065 million, much higher than its current debt of $116 million.
We are also pleased with the company’s efforts to reward its shareholders, despite current uncertainties. In June 2021, FedEx raised its quarterly dividend by 10 cents to 75 cents per share (or $3 annually). In December 2021, FedEx's board cleared a new share buyback scheme worth $5 billion. As part of the buyback program, FedEx entered into an accelerated buyback agreement with Goldman Sachs. Under the agreement, FedEx has agreed to buy back $1.5B of its common stock from Goldman, with an initial delivery of approximately 4.8 million shares based on current market prices. Purchases under the accelerated share repurchase program are expected to be completed before the end of fiscal 2022 (before May 31, 2022).
However, in the first nine months of fiscal 2022, capital expenditures increased 4% from the prior-year period to $4.37 billion primarily due to higher spending on package handling equipment at all segments, increased spending on vehicles and trailers at the Express and Ground units in addition to increased spending on facilities at the Ground unit. The increase in capital spending in fiscal 2022 is likely to dent profit margins.
Zacks Rank & Stocks to Consider
FedEx currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Transportation sector are Expeditors International of Washington, Inc. (EXPD - Free Report) , Old Dominion Freight Line, Inc. (ODFL - Free Report) and Triton International Limited .
Expeditors has an earnings surprise of 34.2%, having surpassed the Zacks Consensus Estimate in all of the past four quarters. Expeditors is being aided by the uptick in airfreight revenues. We are optimistic about the company’s buyout of Fleet Logistics’ Digital Platform. The acquisition has boosted Expeditors’ online LTL shipping platform, Koho. The move is in line with the company's focus on Digital Solutions.
The long-term expected EPS (three to five years) growth rate for Old Dominion is pegged at 16%. Old Dominion is benefiting from the strong performance of the LTL segment owing to improved freight conditions. In 2021, revenues from the LTL services segment increased 30.7% on a year-over-year basis.
Driven by the tailwinds, the stock has increased 34.3% in the past year. ODFL currently carries a Zacks Rank #2 (Buy).
The long-term expected EPS (three to five years) growth rate for Triton is pegged at 10%. Gradual increases in trade volumes and container demand bode well for the company. With easing coronavirus-led restrictions in the United States and Europe, the company saw a strong rebound in its business in the third, the fourth of 2020 as well as in each of the four quarters of 2021.
Driven by the tailwinds, the stock has increased 25.3% in the past year. TRTN currently carries a Zacks Rank #2.
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Solid Liquidity Boosts FedEx (FDX) Amid Rising Expenses
We have recently updated a report on FedEx Corporation (FDX - Free Report) .
FedEx has an impressive Growth Score of A. This style score condenses all the essential metrics from the company’s financial statements to get a true sense of quality and sustainability of growth.
FedEx's liquidity position is solid. The company's current ratio, a measure of liquidity, was pegged at 1.39 at the end of the third quarter of fiscal 2022. A current ratio of more than 1 indicates that the company's assets will be able to cover its debts that are due at the end of the year. FDX exited the third quarter of fiscal 2022 with cash and equivalents of $6,065 million, much higher than its current debt of $116 million.
We are also pleased with the company’s efforts to reward its shareholders, despite current uncertainties. In June 2021, FedEx raised its quarterly dividend by 10 cents to 75 cents per share (or $3 annually). In December 2021, FedEx's board cleared a new share buyback scheme worth $5 billion. As part of the buyback program, FedEx entered into an accelerated buyback agreement with Goldman Sachs. Under the agreement, FedEx has agreed to buy back $1.5B of its common stock from Goldman, with an initial delivery of approximately 4.8 million shares based on current market prices. Purchases under the accelerated share repurchase program are expected to be completed before the end of fiscal 2022 (before May 31, 2022).
However, in the first nine months of fiscal 2022, capital expenditures increased 4% from the prior-year period to $4.37 billion primarily due to higher spending on package handling equipment at all segments, increased spending on vehicles and trailers at the Express and Ground units in addition to increased spending on facilities at the Ground unit. The increase in capital spending in fiscal 2022 is likely to dent profit margins.
Zacks Rank & Stocks to Consider
FedEx currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Transportation sector are Expeditors International of Washington, Inc. (EXPD - Free Report) , Old Dominion Freight Line, Inc. (ODFL - Free Report) and Triton International Limited .
Expeditors has an earnings surprise of 34.2%, having surpassed the Zacks Consensus Estimate in all of the past four quarters. Expeditors is being aided by the uptick in airfreight revenues. We are optimistic about the company’s buyout of Fleet Logistics’ Digital Platform. The acquisition has boosted Expeditors’ online LTL shipping platform, Koho. The move is in line with the company's focus on Digital Solutions.
EXPD currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term expected EPS (three to five years) growth rate for Old Dominion is pegged at 16%. Old Dominion is benefiting from the strong performance of the LTL segment owing to improved freight conditions. In 2021, revenues from the LTL services segment increased 30.7% on a year-over-year basis.
Driven by the tailwinds, the stock has increased 34.3% in the past year. ODFL currently carries a Zacks Rank #2 (Buy).
The long-term expected EPS (three to five years) growth rate for Triton is pegged at 10%. Gradual increases in trade volumes and container demand bode well for the company. With easing coronavirus-led restrictions in the United States and Europe, the company saw a strong rebound in its business in the third, the fourth of 2020 as well as in each of the four quarters of 2021.
Driven by the tailwinds, the stock has increased 25.3% in the past year. TRTN currently carries a Zacks Rank #2.