Yahoo Finance Here's Why Investors Should Buy FedEx (FDX) Stock for Now
FedEx Corporation FDX performed well in the past year and has the potential to sustain the momentum. If you have not taken advantage of its share price appreciation yet, it is time to add the stock to your portfolio.
Let’s look at the factors that make the stock an attractive pick.
An Outperformer: A glimpse at the company’s price trend reveals that its shares have increased 11.9% in the past year compared with a 1.2% rise of the industry it belongs to.
Image Source: Zacks Investment Research
Solid Rank & VGM Score: FedEx currently carries a Zacks Rank #2 (Buy) and has a VGM Score of B. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 (Strong Buy) or 2, offer the best investment opportunities. Thus, the company seems to be an appropriate investment proposition at the moment.
Northward Estimate Revisions: Five estimates for 2023 moved north in the past 60 days versus one southward revision, reflecting analysts’ confidence in the company. The Zacks Consensus Estimate for 2023 earnings has moved up 2.7% in the past 60 days.
Positive Earnings Surprise History: FedEx has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in two of the trailing four quarters and missed the other two, delivering an earnings surprise of 8.8%, on average.
Driving Factors: FedEx's liquidity position is solid. Notably, the company's current ratio, a measure of liquidity, was pegged at 1.32 at the third quarter of fiscal 2023-end. A current ratio of more than one indicates that the company's assets will be able to cover its debts due at the year’s end. Moreover, the company exited the third quarter of fiscal 2023 with cash and equivalents of $5,373 million, much higher than its current debt of $147 million.
We are pleased with the company’s efforts to reward its shareholders even in these difficult times. In April 2023, FedEx raised its quarterly dividend by 10% to $1.26 per share (or $5.04 annually). The raised dividend is anticipated to be paid on Jul 3, 2023, to shareholders of record at the close of business on Jun 12, 2023. FDX is also active on the buyback front. During fiscal 2022, FedEx repurchased shares worth $2.2 billion.
Other Stocks to Consider
Some other top-ranked stocks in the Zacks Transportation sector are Copa Holdings, S.A. CPA and Alaska Air Group ALK.
Copa Holdings, which currently sports a Zacks Rank #1, is aided by improved air-travel demand. Management expects the current-year load factor (percentage of seats filled by passengers) to be 85%, assuming the rosy traffic scenario continues. You can see the complete list of today’s Zacks #1 Rank stocks here.
For second-quarter and full-year 2023, CPA’s earnings are expected to register 669% and 65% growth, respectively, on a year-over-year basis.
Alaska Air Group, currently carrying a Zacks Rank #2, also benefits from the buoyant air-travel demand. Due to upbeat air-travel demand and favorable pricing, Alaska Air's top line increased 31% year over year in the March quarter. ALK expects to boost its fleet and workforce in 2023 to meet the anticipated high demand.
For second-quarter and full-year 2023, ALK’s earnings are expected to register 12% and 44.8% improvements, respectively, on a year-over-year basis.
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FedEx Corporation (FDX) : Free Stock Analysis Report
Copa Holdings, S.A. (CPA) : Free Stock Analysis Report
Alaska Air Group, Inc. (ALK) : Free Stock Analysis Report
