Analysts are a bit less skeptical
Shipping giant FedEx Corporation (NYSE:FDX) stepped into the earnings confessiona last night, reporting fiscal fourth-quarter profits and revenue that topped expectations, marking record earnings for its Freight and Ground units. Investors aren't buying it though, as many turn to the firm's missed 2022 earnings forecast, which suffered as the company struggles to find workers to fill open positions -- a phenomena that is affecting businesses across the board. The equity has turned lower as a result, and at last check it was down 3.6% at $292.86.
Analysts are approaching FedEx's mixed earnings results with a bit less skepticism. Stifel lifted its price target to $344 from $339, while BMO lifted its estimate to $315 from $305. Morgan Stanley maintained its "equal-weight" rating, saying it expects the company to follow in competitor United Parcel Service's (UPS) lead in continuing to hike surcharges during its peak season as a way to recover some of its higher costs and extra capacity investments. Credit Suisse also chimed in, commending FedEx's strong pricing narrative, and lifting its price target to $373.
Just one month out from its May 27 record peak of $319.90, the shares of FedEx still boast an impressive 124.8% year-over-year lead, though they've clearly cooled from this level. The stock did see a bounce at its 100-day moving average, which also captured a late-March pullback, though yesterday's climb above a recent ceiling at its 40-day moving average appears to be short-lived, as FDX erases most of this week's gains.
Options activity is running wild already, with 92,000 calls and 58,000 puts across the tape so far -- four times the intraday average. The most popular is the weekly 6/25 320-strike call, followed by the July 350 call, with positions being opened at both.