FedEx (FDX) is one of the more noteworthy names on this week's earnings calendar and for good reason it seems. The stock jumped more than 11% out of the gate Wednesday after the logistics giant beat top- and bottom-line expectations for its fiscal fourth quarter and issued an inline outlook for its fiscal 2025.
In the quarter ended May 31, FedEx's said its revenue increased 0.9% from the year prior to $22.1 billion and its operating margin improved 40 basis points to 8.5%. (A basis point = 0.01%.) The company also reported a 9.5% year-over-year increase in its earnings per share (EPS) to $5.41.
"We made significant progress in fiscal 2024 and ended the year strong, delivering four consecutive quarters of expanding operating income and margin in a challenging revenue environment," FedEx CEO Raj Subramaniam said in a statement.
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Subramaniam added that the results reflect the continued execution of the company's DRIVE cost-cutting initiatives. "We expect this momentum to continue in fiscal 2025 as we advance our efforts to create the world's most flexible, efficient, and intelligent network," the executive said.
FedEx's top- and bottom-line results came in ahead of analysts' expectations. According to Yahoo Finance, Wall Street was anticipating revenue of $22.07 billion and earnings of $5.35 per share.
FDX also provided its outlook on fiscal 2025, calling for low-to-mid single-digit percentage revenue growth from the prior year and earnings in the range of $20 to $22 per share. This satisfied analysts' expectations for revenue growth of 3.1% and earnings of $20.91 per share.
Is FedEx stock a buy, sell or hold?
Wall Street is bullish towards the industrial stock. According to S&P Global Market Intelligence, the average analyst target price for FDX stock is $312.87, representing implied upside of roughly 7% to current levels. Additionally, the consensus recommendation is Buy.
Financial service firm Stifel is one of the more bullish outfits on FDX stock with a Buy rating and an updated price target of $327, increased from its previous target of $303.
"FedEx has been powering through a bold and transformative cost savings program in DRIVE, and network consolidation in Network 2.0," Stifel said in a note this morning. "There's a lot of good stuff happening at FedEx right now, in our view, and provided management can stay on track, we continue to like the opportunity here."
The $327 price target represents implied upside of nearly 12% to current levels.
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