FedEx will report earnings after the bell yesterday at the NYSE, and investors will be watching closely for details about the delivery giant’s important holiday season.
FedEx and rival United Parcel Service (UPS) have come under investors’ scrutiny lately, thanks to Amazon.com.
The e-commerce giant, once a blessing, has now become a threat, especially as it looks to doing its own deliveries–even as traditional the logistics companies have committed to investing to handle increased volume.
FedEx has begun to address that threat head-on by announcing plans to open 500 FedEx Office stores inside Walmart locations, but it’s too soon to know whether they will have an impact.
Still, there are FedEx bulls. Bernstein’s David Vernon reiterated an Outperform rating and a $290 price target on the stock, despite the recent negative investor sentiment.
He believes FedEx can beat expectations on the top and bottom line, albeit modestly, thanks to a strong year in global airfreight and a tighter transportation marketplace.
And while weather and fuel costs may be a headwind in the quarter, Vernon thinks that investors will look past these factors and focus on how FedEx is growing sales as demand remains tight.
FedEx began yesterday morning in an upswing, attracting 1.25% to $252.74. The Industrial Select Sector SPDR ETF (XLI) was up 0.5%.
- With reports from Barrons
.
