FedEx Stock Gears Up for Quarterly Report

FedEx has a history of dismal post-earnings reactions, however

Fernanda Horner
Sep 11, 2020 at 3:00 PM
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The shares of FedEx Corporation (NYSE: FDX) are up 0.9% at $226.83 this afternoon, earlier hitting an almost two-year high of $233.67 after receiving two price-target hikes from Citigroup and Cowen and Company to $260 and $264, respectively. The positive price action comes just a few days ahead of the company's fiscal first-quarter earnings, due out after the close on Tuesday, September 15. Below, we will take a look at how the security has performed on the charts of late, and explore some of the options activity surrounding FDX ahead of the event.  

FedEx shares have been on an upward trajectory since mid-March. A post-earnings bull-gap in late July boosted the shares even higher, with added support from the 10-day moving average. Now, the stock is sitting at nearly triple its mid-March lows near the $88 level. Longer term, FDX is performing well, and sports a 50.5% year-to-date lead.

FDX

Analysts are mostly optimistic toward the equity. Of the 21 in coverage, 12 sport a "buy" or better rating, while the remaining nine carry a tepid "hold." Meanwhile, the stock's 12-month consensus price target of $219.08 is a 3.8% discount to current levels, indicating more price-target hikes may be on the horizon.

That optimistic sentiment is reverberating through the options pits, where calls hold the advantage. The security sports a 50-day call/put volume ratio of 3.42 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the highest percentile of its annual range. This suggests a healthier-than-usual appetite for bullish bets of late.  

Lastly, a look at the equity's history of post-earnings reactions over the past two years shows a generally dismal response. During its last eight reports, more than half of these next-day sessions were lower, including a 12.9% drop this time last year. The security averaged a post-earnings swing of 7.9% the last eight quarters, regardless of direction. This time around, the options market is pricing in a larger-than-usual move of 11.3%. 


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