3 FedEx Analysts React To Mixed Q4 Earnings: 'Analyst Day Anticipation Building'

FedEx Corporation FDX shares traded higher by 7% on Friday after the conglomerate reported fiscal fourth-quarter earnings that were better than analysts had feared.

On Thursday, FedEx reported fourth-quarter adjusted EPS of $6.87, in-line with consensus analyst estimates. Revenue for the quarter was $24.4 billion, missing Wall Street expectations of $24.57 billion. Revenue was up 7.9% from a year ago.

The Memphis, Tennessee-based company reported operating profit margins of 9.2%, up from 8.7% a year ago but slightly below the 9.3% analysts were expecting. FedEx Freight revenue per shipment was up 28% year-over-year. FedEx said it repurchased $2.2 billion in FedEx stock in fiscal 2022.

Looking ahead, FedEx guided for fiscal 2023 adjusted EPS of between $22.50 and $24.50, well above Wall Street estimates of $22.21.

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Voices From The Street: Bank of America analyst Ken Hoexter said FedEx's upcoming Analyst Day event next week will be critical given it's the first such event in 10 years.

"We expect it to provide 3-year targets by segment (F23-F25), insight to its sustained revenue quality focus, and improving cash flow outlook," Hoexter wrote.

KeyBanc analyst Todd Fowler said the stage is now set for Analyst Day.

"In our view, F4Q22 results and initial FY23 guidance cleared near-term expectations, particularly considering recent network disruption, cost headwinds, and macro uncertainty, with more modest capital spending and accelerating share repurchases incremental positives," Fowler wrote.

Raymond James analyst Patrick Tyler Brown said FedEx shares are fully valued and the company still has a lot to prove to investors.

"While FDX continues to lean into pricing and the environment remains relatively constructive as the company closed out FY2022, we believe FDX squarely remains a 'show me' story that will
largely be driven by an improvement in its Ground segment & improving FCF profile," Brown wrote.

Ratings And Price Targets:

• Bank of America has a Buy rating and $276 target.
• KeyBanc has an Overweight rating and $300 target.
• Raymond James has a Market perform rating.
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