[Updated: Sep 23, 2021] FDX First Quarter Results Update
FedEx (NYSE: FDX) recently released its fiscal 2022 first quarter results, which were below our expectations. The company reported revenue of $ 22.0 billion, as expected and slightly above the consensus estimate of $ 21.9 billion. The 14% year-over-year revenue growth was driven by higher sales across all of its segments – Express, Ground and Freight. Our dashboard on FedEx revenue offers more details on the business segments.
However, looking at the result, the company reported adjusted EPS of $ 4.37, well below our forecast of $ 5.11 and $ 5.00 according to the consensus estimate. This can be attributed to rising costs, mainly a limited labor supply leading to higher wages, while fuel costs have also increased in recent times. The company expects labor availability to decline in the second half of the year. That said, he lowered his profit outlook for the year 2022 to now range in the range of $ 19.75 to $ 21.00, compared to his earlier forecast of $ 20.50 to $ 21.50. We were previously working with a forecast of $ 21.33 for the full year 2022, and we will update our model soon to reflect the recently announced numbers. The first quarter numbers are unlikely to please investors, especially given a downward revision to the outlook for the full year. In fact, after hours of trading, FDX stock is down more than 5%.
[Updated: Sep 20, 2021] FDX First Quarter Results Snapshot
FedEx (NYSE: FDX) is expected to release its first quarter 2021 results on Tuesday, September 21. We expect FedEx to likely post revenues and profits above street expectations. With an increase in the number of Covid-19 cases in the United States, it is likely that FedEx’s overland shipment volume trended upward during the quarter, bodes well for its overall revenue growth. ‘business. Lately, the company has seen its margins increase, which has contributed to the growth of its profits. However, higher input costs may have limited overall margin growth in the first quarter.
When it comes to FDX stock, our forecast indicates that FedEx’s valuation is around $ 348 per share, which is 36% above the current market price of around $ 255, implying that the stock FDX is attractively valued at its current levels. Our interactive dashboard analysis on FedEx Pre-Earnings has additional details.
(1) Expected revenue higher than consensus estimates
Trefis estimates FedEx first quarter 2022 revenue to be around $ 22.0 billion, slightly above the consensus estimate of $ 21.9 billion. FedEx, in recent quarters, has seen an increase in demand for shipments, mainly due to an increase in e-commerce orders, with people preferring to stay at home during the pandemic. However, Fedex
2) EPS likely to be higher than consensus estimates
FedEx’s adjusted earnings per share for the first quarter of fiscal 2022 is expected to be $ 5.11 per Trefis analysis, or 2% above the consensus estimate of $ 5.00. FedEx’s net income of $ 1.4 billion in the fourth quarter of fiscal 2021 reflects a sharp 2-fold increase from its figure of $ 663 million in the previous year quarter. This can be attributed to higher revenues and expanding margins. However, rising costs could impact overall profit growth in the first quarter.
(3) Estimate of the share price 36% above the current market price
Through our FedEx Rating, with an EPS estimate of around $ 21.33 and a P / E multiple of 16x in 2022, that translates to a price of $ 348, which is roughly 36% above the current market price of around 255. $. Although FedEx’s 16x P / E multiple is slightly above levels seen in recent years, it is justified given strong earnings growth. FedEx’s adjusted EPS fell from $ 15.57 in fiscal 2019 to $ 9.52 in 2020, before rising to $ 18.23 in 2021, and is now expected to hit $ 21.33 in 2022.
Note: P / E multiples are based on the stock price at the end of the year and reported (or expected) profits for the entire year
Although FDX stock may experience a short-term increase, 2020 has created many price discontinuities that can provide some interesting trading opportunities. For example, you’ll be surprised how counterintuitive stock valuation is to United Parcel Service vs Sprouts Farmers Market.
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