Trading FedEx Post Q3 Fiscal Earnings
After ending last year down –33%, FedEx shares have enjoyed an impressive +26% rally this year so far. To ascertain whether this is just a bear market rally for the stock, investors have been keeping a close eye on the company’s earnings report.
Learn more about FedEx’s recent earnings report, what the analysts are forecasting for the stock and how to trade it below.
|Symbol for Invest.MT5 Account:||FDX|
|Date of Idea:||21 Mar 2023|
|Time Line:||1 - 6 months|
|Position Size for Invest.MT5 Account:||Max 5%|
- The Invest.MT5 account allows you to buy real stocks and shares from 15 of the largest stock exchanges in the world.
All trading is high risk and you can lose more than you risk on a trade. Never invest more than you can afford to lose as some trades will lose and some trades will win. Start small to understand your own risk tolerance levels or practice on a demo account first to build your knowledge before investing.
FedEx Fiscal Q3 2023 Earnings Report
Here are some of the key highlights from the latest fiscal third-quarter earnings report from FedEx:
- Earnings per share of $3.41 vs $2.73 expected
- Revenue of $22.17 billion vs $22.74 expected
- Net income of $771 million down from same quarter prior year
- Expected $4 billion cost reduction by end of 2025
- 11% increase in revenue per shipment due to rise in shipping rates
- Earnings per share for fiscal 2023 expected between $14.60 and $15.20, higher than Wall Street forecasts
While FedEx beat analyst expectations on earnings per share, it missed its revenue forecast. Expected cost cutting measures have already started to take effect with staffing expenses down 8% year over year and a saving of $1.2 billion on enterprise costs year on year.
Measures include reduced flight hours, grounding plans, a reduction in office space and a reorganisation of pickup and delivery routes domestically. FedEx plan to save $4 billion by 2025 through these types of cost cutting measures.
The earnings report highlighted some good and bad news. Investors liked that management have increased their earnings forecast for the year but were reminded of tense contract negotiations with its pilots’ union. A potential strike could cause a serious revision on the company’s yearly outlook and weigh on its share price.
FedEx Stock Forecast - What do the Analysts Say?
According to analysts polled by TipRanks for a FedEx stock forecast in the past 3 months, there are currently 14 buy, 8 holds and 0 sell ratings on the stock. The highest price level for a FedEx stock forecast is $305.00 with the lowest price target at $145.00.
The average price target for a FedEx stock forecast is $244.40.
An Example Trading Idea for the FedEx Stock Price
An example trading idea for the FedEx share price could be as follows:
- Buy the stock on a break above the post earnings high at $227.00.
- Target just below the highest analyst price target of $305.00.
- Keep your risk small at a maximum of 5% of your total account.
- Time Line = 1 – 6 months
- If you buy 10 FedEx shares:
- If target is reached = $780.00 potential profit ($305.00 - $227.00 * 10 shares).
Remember that markets go up and down and it is unlikely the share price will move up in a straight line. In fact, it may even go much further down before it rises, especially considering how volatile the stock market is right now with a banking liquidity crisis and central bank interest rate hikes.
Be sure to exercise good risk management and always know how much you could potentially lose on a trade and the risks involved, as well as the costs.
With the Admirals Invest.MT5 account you can buy and sell US stocks with a commission from $0.02 per share. This means buying 10 shares in FedEx stock would result in a commission of $0.20 ($0.02 * 10 shares) for executing a per-side transaction.
There is a low minimum transaction fee of $1. So, the example trading idea above would result in a commission of just $1 overall!
How to Buy FedEx Stock in 4 Steps
With Admirals, you can buy shares in companies like FedEx with a low commission of just $0.02 per share and a low minimum commission of just $1 on US stocks.
- Open an account with Admirals to access the Trader’s Room.
- Click on Trade on one of your live or demo accounts to open the web platform.
- Search for your stock at the bottom of the Market Watch window and drag the symbol onto the chart.
- Use the one-click trading feature, or right-click and open a trading ticket to input your trade size, stop loss and take profit level.
Click on the banner below to trade FedEx stock today! ▼▼▼
Do You See the FedEx Stock Price Moving Differently?
Remember that all analytics and trading ideas are based on the personal view and experience of the author.
If you believe there is a higher chance FedEx's share price will move lower, then you can also trade short from a CFD (Contracts for Difference) trading account which Admirals also provide.
The Trade.MT5 and Trade.MT4 account allows you to speculate on the price direction of stocks and shares using CFDs.
This means you can trade long and short to potentially profit from rising and falling stock prices. Learn more about CFDs in this How to Trade CFDs article.
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