FedEx Corporation (NYSE: FDX) has seen a remarkable resurgence, boasting five consecutive weeks of gains and a staggering 62.77% surge in its share price this year, setting the stage to break a two-year decline.
As investors anticipate the impending second-quarter earnings report, the question remains: can FedEx surpass its previous outstanding performance? Analysts, in consensus, forecast a robust second-quarter profit of $976.6 million, outshining last year’s $788 million, mirroring the optimistic sentiment. However, revenue expectations indicate a slight dip from $22.8 billion to $22.36 billion, setting the stage for keen market scrutiny.
This narrative unfolds against the backdrop of challenges encountered during the global shipping downturn, coupled with adjustments to accommodate shifting post-pandemic e-commerce demands. In response, FedEx strategized with cost-cutting measures, aiming to fortify fiscal resilience in 2024 amid subdued demand. The company anticipate a steadier revenue trajectory, forecasting a flat to low-single-digit growth outlook.
Technical
FedEx’s share price has staged a remarkable rebound, erasing all losses incurred in 2022, and is now poised for a staggering year-to-date gain exceeding 50%. Last year’s downtrend, marked by a descent within a descending channel pattern under the 100-day moving average, saw a drastic shift. The narrative switched gears as the stock surged beyond the channel and moving average, signalling an emerging uptrend.
Amidst this trajectory, a support level solidified at $224.69 per share, following a retracement that drove the stock into oversold RSI territory. This marked a pivotal moment for the bulls, triggering a noteworthy rebound. The stock is currently on the cusp of reaching its all-time high of $319.90 per share.
The impending second-quarter earnings report holds sway over the stock’s immediate direction. An earnings surprise surpassing market expectations could instil further optimism, potentially propelling the stock towards the $319.90 mark. Conversely, a retreat might encounter substantial support at the $224.69 level, mitigating downward pressures.
Summary
FedEx has charted an impressive trajectory, surging past its previous year’s hurdles and setting the stage for a momentous turnaround. The company’s resilience amidst a challenging global shipping landscape, coupled with strategic cost-cutting measures, likely positions it optimally for robust fiscal resilience. Anticipation is high for its second-quarter earnings, expected to affirm its potential for sustained growth, potentially signaling a new era of profitability and progress.
Sources: FedEx Corporation, Reuters, TradingView
Piece Written By Nkosilathi Dube, Trive Financial Market Analyst
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