FedEx gains as confidence on the shipper grows ahead of earnings

 

• Credit Suisse lifts estimates on FedEx (NYSE:FDX) after taking into account accelerating e-commerce trends and a peak season that could prove to be stronger and longer than anticipated.
• "We are now dialing in higher peak surcharge revs for both Q2 and Q3. We further note that FDX typically incurs the bulk of cost related to the peak season ramp in Q2, while the revs are often shifted into Q3 (this was particularly true in 2Q20, given the late timing of Cyber week). As such, we now are modeling for Q2 Ground margins of 9.5% (vs. prev 8.8%), marking the first time in 8 qtrs of y/y improvement. Underpinning this are our assumptions of +4% in rev/piece (vs prev +3%) and cost/piece inflation of +20bps (vs. prior +60bps)."
• The firm expects FQ2 EPS of $4.14 vs. $3.25 prior and $3.94 consensus. CS sees FY21 EPS of $17.02 vs. $15.68 prior and $16.20 consensus.
• An Outperform rating on FedEx on the shipper and price target of $365 is kept in place.
• Shares of FedEx are up 2.25% in premarket action to $295.99.
• FedEx has topped consensus earnings marks three quarters in a row.
• https://seekingalpha.com/news/3643952-fedex-gains-confidence-on-shipper-grows-ahead-of-earnings