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FedEx gears up to busiest time of year

Markets are expecting FedEx to post improving figures but enthusiasm is tempered with soft Black Friday figures.

CFDs are a leveraged product and can result in losses that exceed deposits. Trading CFDs may not be suitable for everyone, so please ensure you fully understand the risks and take care to manage your exposure.
FedEx warehouse
Source: Bloomberg

On Wednesday 10 December FedEx is due to post its second-quarter figures. The adjusted earnings per share is due to increase from 210 cents to 218.6 cents. Sales for the parcel delivery firm are also called higher, moving from $11.7 billion up to $11.973 billion. This should help contribute to the company’s pre-tax profits increasing from $937 million up to $966.15 million.

FedEx, the multi-national parcel delivery firm with a market capitalisation of over $50 billion, has seen expectation levels increase. The shifting demographic of retail consumers has been clear to see for some time.

Dropping footfall in high-street stores has been inversely reflected by the increasing importance that companies have placed on offering attractive online sales platforms. The two main options for online shopping have been click and collect, and click and deliver. The latter of these two is the main driving force behind the resurgence in parcel delivery firms.

Being in the right place at the right time is only half the battle and without suitable investment in infrastructure, it would be worthless. This is arguably where FedEx has stolen a march on its competitors. Between the 28 November-24 December the company expects to deliver some 290 million packages worldwide.

Institutional ratings show 12 strong buys, three buys and 13 holds with no sell notes. In the short-term the divergence away from the 200-day moving average is a little disconcerting. The shares at the moment are heavily overbought and buying on a corrective pull back closer to the 50-day moving average at $166.85 would be more appealing.  

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CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.

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