FedEx To Exceed Expectations In Q2 Despite Transport Sector Headwinds, Analyst Predicts

Citi analyst Christian Wetherbee maintained FedEx Corp FDX as a top pick.

Ahead of 2Q results on December 19, the analyst modestly tweaked the composition of 2Q and FY24 estimates but remained at $4.51 and $18.75, 9% and 4% above the Street, respectively. 

Wetherbee notes macro factors and DRIVE cost initiatives are progressing as expected, which, along with better LTL (less-than-truckload) results and an extra Cyber-Week day, should yield another upside quarter and keep the year on track to exceed the top end of management's EPS range. 

That said, the question is whether FedEx will raise the guide, and the analyst is not sure they will, particularly given the fundamental headwinds seen across Transports. 

While FedEx has outperformed, the analyst's sentiment gauge would suggest a more balanced setup than in 1Q, so a beat and maintain may be the base case for most investors. In this context, the analyst likes the setup. 

Price Action: FDX shares traded higher by 0.18% at $256 on the last check Tuesday.

Photo Via Company