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Memphis, Tennessee-based FedEx Corporation (FDX) is a logistics giant that offers a wide range of services, including delivery, transportation, and e-commerce solutions. With a market cap of $68.3 billion, the company’s business services include customs brokerage, trade management tools and data, and logistics services.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and FDX fits right into that category with its market cap exceeding this threshold, reflecting its substantial size, influence, and dominance in the integrated freight and logistics industry. Through strategic marketing and investments in technology, the global logistics leader has built a strong brand and competitive edge in the industry. FedEx's global network and innovative services, like FedEx Surround Select and SenseAware ID, enhance customer experience and set it apart from competitors. The company's shift to cloud-based systems underscores its commitment to operational efficiency and staying ahead in the evolving logistics landscape.
Despite its notable strength, FDX slipped 11% from its 52-week high of $313.84, achieved on Jul. 16. Over the past three months, FDX stock dipped 1.6%, underperforming the Dow Jones Industrials Average’s ($DOWI) 8.6% gains during the same time frame.
In the longer term, shares of FDX rose 10.4% on a YTD basis and climbed 2.6% over the past 52 weeks, underperforming DOWI’s YTD gains of 17.4% and 22.1% returns over the last year.
However, FDX is trading above its 50-day and 200-day moving averages since early November, with minor fluctuations recently.
FDX's subpar performance stems from declining package volumes and a shift to deferred services, reducing priority service demand, coupled with increased labor and transportation costs.
On Sept. 19, FDX shares closed up marginally after reporting its Q1 results. The company’s total revenues stood at $21.6 billion, down marginally from the year-ago quarter. Its adjusted EPS of $3.60, missed the analyst estimates of $4.82.
FDX’s rival, United Parcel Service, Inc. (UPS) shares lagged behind the stock, plummeting 17.2% on a YTD basis and 16.7% over the past 52 weeks.
Wall Street analysts are moderately bullish on FDX’s prospects. The stock has a consensus “Moderate Buy” rating from the 27 analysts covering it, and the mean price target of $310.41 suggests a potential upside of 11.1% from current price levels.
