Why FedEx Shares Are Delivering Returns To Investors Today

FedEx Corp FDX is trading higher Friday after the company announced better-than-expected fiscal second-quarter financial results and raised guidance.

FedEx reported quarterly adjusted earnings of $4.83 per share, which beat the estimate of $4.28 per share. The company reported quarterly revenue of $23.5 billion, which beat the estimate of $22.47 billion.

FedEx raised its fiscal 2022 earnings guidance from a range of $19.75 to $21 per share to a range of $20.50 to $21.50 per share versus the estimate of $19.64 per share. 

FedEx also announced a new $5 billion share repurchase program. The company plans to enter into a $1.5 billion accelerated share repurchase program in which 80% of the shares to be repurchased in the accelerated program will be received by FedEx at the accelerated share repurchase agreement’s inception.

"FedEx operating income grew in our second quarter, driven by strong revenue growth and effective management of our cost and expected labor availability challenges," said Michael Lenz, executive vice president and CFO of FedEx. "While adjusted earnings per share was unchanged year over year, this year’s effective tax rate was significantly higher."

Analyst Assessment: Multiple analyst firms weighed in on the stock following FedEx's financial results:

• Stephens & Co. analyst Jack Atkins maintained FedEx with an Overweight rating and raised the price target from $330 to $345.
• Morgan Stanley maintained FedEx with an Equal-Weight rating and raised the price target from $250 to $260.
• Deutsche Bank analyst Amit Mehrotra maintained FedEx with a Buy rating and raised the price target from $299 to $310.
• JP Morgan analyst Brian Ossenbeck maintained FedEx with an Overweight rating and raised the price target from $305 to $312.

See Also: Why This Investor Prefers UPS Over FedEx Stock

FDX Price Action: FedEx has traded as high as $319.90 and as low as $216.34 over a 52-week period.

The stock was up 7.48% at $256.40 at time of publication.

Photo: courtesy of FedEx.