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FedEx Fiscal Q1 Earnings Disappoints: ETFs in Focus
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After the closing bell on Sep 22, transport bellwether FedEx (FDX - Free Report) delivered disappointing first-quarter fiscal 2023 results. The courier company missed both earnings and revenue estimates.
The earnings miss has pushed shares of FDX down by 1% at the close in after-market hours. As a result, ETFs with the highest allocation to FedEx are expected to gain. These include First Trust Nasdaq Transportation ETF (FTXR - Free Report) , American Customer Satisfaction ETF (ACSI - Free Report) , ProShares Supply Chain Logistics ETF (SUPL - Free Report) , iShares U.S. Transportation ETF (IYT - Free Report) , and Pacer Industrials and Logistics ETF (SHPP - Free Report) .
FedEx Earnings in Focus
Earnings per share came in at $3.44, missing the Zacks Consensus Estimate of $3.69 but declining from the year-ago earnings of $4.37 per share. Revenues grew 5.5% year over year to $23.2 billion and fell shy of the estimated $23.35 billion.
The parcel company is looking to reduce costs. It plans to generate total cost savings of $2.2-$2.7 billion in fiscal 2023. In the first quarter, the company realized about $300 million of these savings and expects to score $700 million in savings in the second quarter.
For second-quarter fiscal 2023, FedEx issued revenue guidance of $23.5-$24 billion and earnings per share guidance of $2.65 or greater (see: all the Industrials ETFs here).
First Trust Nasdaq Transportation ETF offers exposure to the 30 most-liquid U.S. transportation securities based on volatility, value and growth by tracking the Nasdaq US Smart Transportation Index. FedEx holds a 3.2% share in the basket. Railroads, trucking, automobiles and auto parts occupy the top spots in the basket.
First Trust Nasdaq Transportation ETF has amassed $76.4 million in its asset base and charges 60 bps in annual fees. The average trading volume is moderate at 21,000 shares. The fund has a Zacks ETF Rank #2 (Buy).
American Customer Satisfaction ETF seeks to track the performance of the American Customer Satisfaction Investable Index, which utilizes proprietary customer satisfaction scores to weight stocks within each sector by their relative customer satisfaction scores. It holds 35 stocks in its basket, with FedEx making up for a 2.7% share (read: 'Shrinkflation' to Save Consumer Staples ETFs).
American Customer Satisfaction ETF has accumulated $69.2 million in its asset base while trades in a meager average daily volume of under 500 shares. It charges 65 bps in annual fees.
ProShares Supply Chain Logistics ETF is the first ETF focused exclusively on the companies poised to potentially benefit from the transformation of how raw materials and goods move around the world. These logistics companies include leading global shipping, railroad, air and trucking companies that collectively touch every point of the supply chain. It follows the FactSet Supply Chain Logistics Index, charging investors 58 bps in annual fees. ProShares Supply Chain Logistics ETF holds 41 stocks in its basket, with FedEx accounting for 3.9% of assets.
ProShares Supply Chain Logistics ETF has AUM of $1.7 million and trades in volume of 500 shares per day.
iShares U.S. Transportation ETF tracks the S&P Transportation Select Industry FMC Capped Index, giving investors exposure to a small basket of 49 securities. Of these, FedEx makes up for 3.8% of the assets. Within the transportation sector, railroads and air freight and logistics take the top two spots with 30.4% and 30.2% share, respectively, while trucking (22.5%) and airlines (15.1%) round off the next two.
iShares U.S. Transportation ETF has accumulated $786.3 million in AUM while it sees a good trading volume of around 172,000 shares a day. The fund charges 39 bps in fees per year and has a Zacks ETF Rank #2 with a Medium risk outlook (read: 4 Top-Ranked Sector ETFs to Buy Now).
Pacer Industrials and Logistics ETF tracks the Pacer Global Supply Chain Infrastructure Index, which aims to offer investors exposure to globally-listed stocks and depositary receipts involved in the support and functioning of global distribution supply chains. It holds 103 stocks in its basket, with FedEx accounting for 3.1% share.
Pacer Industrials and Logistics ETF debuted in the space in June and has accumulated $0.9 million in its asset base. It charges 60 bps in annual fees.
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FedEx Fiscal Q1 Earnings Disappoints: ETFs in Focus
After the closing bell on Sep 22, transport bellwether FedEx (FDX - Free Report) delivered disappointing first-quarter fiscal 2023 results. The courier company missed both earnings and revenue estimates.
The earnings miss has pushed shares of FDX down by 1% at the close in after-market hours. As a result, ETFs with the highest allocation to FedEx are expected to gain. These include First Trust Nasdaq Transportation ETF (FTXR - Free Report) , American Customer Satisfaction ETF (ACSI - Free Report) , ProShares Supply Chain Logistics ETF (SUPL - Free Report) , iShares U.S. Transportation ETF (IYT - Free Report) , and Pacer Industrials and Logistics ETF (SHPP - Free Report) .
FedEx Earnings in Focus
Earnings per share came in at $3.44, missing the Zacks Consensus Estimate of $3.69 but declining from the year-ago earnings of $4.37 per share. Revenues grew 5.5% year over year to $23.2 billion and fell shy of the estimated $23.35 billion.
The parcel company is looking to reduce costs. It plans to generate total cost savings of $2.2-$2.7 billion in fiscal 2023. In the first quarter, the company realized about $300 million of these savings and expects to score $700 million in savings in the second quarter.
For second-quarter fiscal 2023, FedEx issued revenue guidance of $23.5-$24 billion and earnings per share guidance of $2.65 or greater (see: all the Industrials ETFs here).
ETFs in Focus
Let’s delve into each ETF below:
First Trust Nasdaq Transportation ETF (FTXR - Free Report)
First Trust Nasdaq Transportation ETF offers exposure to the 30 most-liquid U.S. transportation securities based on volatility, value and growth by tracking the Nasdaq US Smart Transportation Index. FedEx holds a 3.2% share in the basket. Railroads, trucking, automobiles and auto parts occupy the top spots in the basket.
First Trust Nasdaq Transportation ETF has amassed $76.4 million in its asset base and charges 60 bps in annual fees. The average trading volume is moderate at 21,000 shares. The fund has a Zacks ETF Rank #2 (Buy).
American Customer Satisfaction ETF (ACSI - Free Report)
American Customer Satisfaction ETF seeks to track the performance of the American Customer Satisfaction Investable Index, which utilizes proprietary customer satisfaction scores to weight stocks within each sector by their relative customer satisfaction scores. It holds 35 stocks in its basket, with FedEx making up for a 2.7% share (read: 'Shrinkflation' to Save Consumer Staples ETFs).
American Customer Satisfaction ETF has accumulated $69.2 million in its asset base while trades in a meager average daily volume of under 500 shares. It charges 65 bps in annual fees.
ProShares Supply Chain Logistics ETF (SUPL - Free Report)
ProShares Supply Chain Logistics ETF is the first ETF focused exclusively on the companies poised to potentially benefit from the transformation of how raw materials and goods move around the world. These logistics companies include leading global shipping, railroad, air and trucking companies that collectively touch every point of the supply chain. It follows the FactSet Supply Chain Logistics Index, charging investors 58 bps in annual fees. ProShares Supply Chain Logistics ETF holds 41 stocks in its basket, with FedEx accounting for 3.9% of assets.
ProShares Supply Chain Logistics ETF has AUM of $1.7 million and trades in volume of 500 shares per day.
iShares U.S. Transportation ETF (IYT - Free Report)
iShares U.S. Transportation ETF tracks the S&P Transportation Select Industry FMC Capped Index, giving investors exposure to a small basket of 49 securities. Of these, FedEx makes up for 3.8% of the assets. Within the transportation sector, railroads and air freight and logistics take the top two spots with 30.4% and 30.2% share, respectively, while trucking (22.5%) and airlines (15.1%) round off the next two.
iShares U.S. Transportation ETF has accumulated $786.3 million in AUM while it sees a good trading volume of around 172,000 shares a day. The fund charges 39 bps in fees per year and has a Zacks ETF Rank #2 with a Medium risk outlook (read: 4 Top-Ranked Sector ETFs to Buy Now).
Pacer Industrials and Logistics ETF (SHPP - Free Report)
Pacer Industrials and Logistics ETF tracks the Pacer Global Supply Chain Infrastructure Index, which aims to offer investors exposure to globally-listed stocks and depositary receipts involved in the support and functioning of global distribution supply chains. It holds 103 stocks in its basket, with FedEx accounting for 3.1% share.
Pacer Industrials and Logistics ETF debuted in the space in June and has accumulated $0.9 million in its asset base. It charges 60 bps in annual fees.