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Strength Seen in FedEx (FDX): Can Its 4.3% Jump Turn into More Strength?

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FedEx (FDX - Free Report) shares rallied 4.3% in the last trading session to close at $202.11. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 9.4% gain over the past four weeks.

To counter the sharply declining shipping demand, FDX is actively cutting costs to drive the bottom-line. As part of the cost-reduction excercise, FDX has decided to bring about a more than 10% reduction in jobs for officer and director ranks.

This ancipated cut in management jobs is in line with FDX's target of generating cost savings of nearly $3.7 billion in fiscal 2023. The news was shared via an internal memo. As the move will result in cost savings and drive the bottom line, it found favor with investors, causing share price appreciation.

This package delivery company is expected to post quarterly earnings of $2.72 per share in its upcoming report, which represents a year-over-year change of -40.7%. Revenues are expected to be $22.63 billion, down 4.3% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For FedEx, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on FDX going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

FedEx belongs to the Zacks Transportation - Air Freight and Cargo industry. Another stock from the same industry, GXO Logistics (GXO - Free Report) , closed the last trading session 4.6% higher at $54.73. Over the past month, GXO has returned 24.7%.

For GXO Logistics, the consensus EPS estimate for the upcoming report has changed +8.6% over the past month to $0.76. This represents a change of +4.1% from what the company reported a year ago. GXO Logistics currently has a Zacks Rank of #3 (Hold).


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