FedEx Shares Fall 4% Despite 2Q Earnings Beat; Analysts Stay Bullish

FedEx shares were down 3.6% in pre-market trading on Friday even as the company reported better-than-expected results for the second quarter of fiscal 2021 (ended Nov. 30). The company did not provide any outlook for full-year fiscal 2021 despite the strong quarterly results, which perhaps disappointed investors.

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The 2Q FY21 revenue of $20.6 billion grew 19% year-over-year and surpassed analysts’ estimate of $19.5 billion. FedEx (FDX) cited volume growth in FedEx International Priority and U.S. domestic residential package services as well as pricing initiatives across all transportation segments as the reasons for the revenue growth in the quarter.

Meanwhile, 2Q adjusted EPS increased 92% year-over-year to $4.83, handily exceeding analysts’ prediction of $4.01. (See FDX stock analysis on TipRanks)

FedEx did not provide any specific guidance but on its earnings conference call, management stated, “Based on the current trends in our business, we anticipate increased demand to result in higher year-over-year revenue and operating income at FedEx Ground and FedEx Express for the remainder of fiscal 2021.”

On Dec. 14, Credit Suisse analyst Allison Landry increased the price target to $365 from $322 and reiterated a Buy rating on FedEx. The analyst indicated that she expects the company to gain from accelerating e-commerce trends and a peak season that could prove to be stronger and longer, as well as continued tightness in international airfreight markets.

Overall, FedEx scores a Strong Buy analyst consensus based on 11 unanimous Buys. Following the impressive 93.5% year-to-date rise in the shares, the average price target of $338.73 indicates further upside potential of 15.9% in the months ahead.