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FedEx (FDX - Free Report) has been in the headlines recently as Amazon (AMZN - Free Report) spends money on warehouses, planes, and much more in an effort to conquer the shipping industry. Nevertheless, FedEx remains seemingly unfazed and looks poised to grow both its top and bottom lines.
While some causal onlookers might hear that FedEx is doomed, its investors haven’t left. In fact, shares of FedEx have climbed nearly 28% over the last year and hit a new all-time high in mid January. The company also has plans to bolster its business through investments in order to better compete going forward.
FedEx announced on Wednesday that it will invest more than $1 billion to modernize and expand its Tennessee hub in order to make it more efficient and reliable. This move comes after the shipping power made similar renovation plans earlier this year regarding its FedEx Express hub in Indianapolis.
These investments in the future likely won’t pay off for some time, but in the near term, the company is still expected to see its sales and earnings surge.
For the soon-to-be-reported quarter, FedEx is expected to see its sales jump by nearly 8% to hit $16.18 billion. The company is also projected to see its quarterly earnings hit $3.06 per share, which would mark 30.2% growth from the year-ago period. Still, investors need to consider a few more metrics to understand if FedEx is poised to beat this estimate.
Luckily, Zacks Premium customers can utilize the Earnings ESP Screener in order to search for stocks that are expected to beat. Zacks Earnings ESP (Expected Surprise Prediction) looks to find earnings surprises by focusing on the most recent analyst estimates.
This is done because, generally speaking, when an analyst posts an estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.
A positive Earnings ESP paired with a Zacks Rank #3 (Hold) or better ranking helps us feel confident about the potential for an earnings beat. In fact, our 10-year backtest has revealed that this methodology has accurately produced a positive surprise 70% of the time.
FedEx currently has an Earnings ESP of 2.2%, which means earnings estimates have been higher directly ahead of FDX’s Q3 results. When paired with the company’s current Zacks Rank #3 (Hold) standing, investors should consider the stock as one that seems ready to top estimates.
Investors should also note that FedEx topped its earnings estimate by 10.8% last quarter.
FedEx is set to report its fiscal third quarter 2018 earnings results after market close on Tuesday, March 20.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 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: Bigstock
Is FedEx (FDX) Set to Beat Earnings Estimates?
FedEx (FDX - Free Report) has been in the headlines recently as Amazon (AMZN - Free Report) spends money on warehouses, planes, and much more in an effort to conquer the shipping industry. Nevertheless, FedEx remains seemingly unfazed and looks poised to grow both its top and bottom lines.
While some causal onlookers might hear that FedEx is doomed, its investors haven’t left. In fact, shares of FedEx have climbed nearly 28% over the last year and hit a new all-time high in mid January. The company also has plans to bolster its business through investments in order to better compete going forward.
FedEx announced on Wednesday that it will invest more than $1 billion to modernize and expand its Tennessee hub in order to make it more efficient and reliable. This move comes after the shipping power made similar renovation plans earlier this year regarding its FedEx Express hub in Indianapolis.
These investments in the future likely won’t pay off for some time, but in the near term, the company is still expected to see its sales and earnings surge.
For the soon-to-be-reported quarter, FedEx is expected to see its sales jump by nearly 8% to hit $16.18 billion. The company is also projected to see its quarterly earnings hit $3.06 per share, which would mark 30.2% growth from the year-ago period. Still, investors need to consider a few more metrics to understand if FedEx is poised to beat this estimate.
Luckily, Zacks Premium customers can utilize the Earnings ESP Screener in order to search for stocks that are expected to beat. Zacks Earnings ESP (Expected Surprise Prediction) looks to find earnings surprises by focusing on the most recent analyst estimates.
This is done because, generally speaking, when an analyst posts an estimate right before an earnings release, it means that they have fresh information which could potentially be more accurate than what analysts thought about a company two or three months ago.
A positive Earnings ESP paired with a Zacks Rank #3 (Hold) or better ranking helps us feel confident about the potential for an earnings beat. In fact, our 10-year backtest has revealed that this methodology has accurately produced a positive surprise 70% of the time.
FedEx currently has an Earnings ESP of 2.2%, which means earnings estimates have been higher directly ahead of FDX’s Q3 results. When paired with the company’s current Zacks Rank #3 (Hold) standing, investors should consider the stock as one that seems ready to top estimates.
Investors should also note that FedEx topped its earnings estimate by 10.8% last quarter.
FedEx is set to report its fiscal third quarter 2018 earnings results after market close on Tuesday, March 20.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 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 >>