Citi analyst Christian Wetherbee has maintained FedEx Corp (FDX) as a top pick in a recent report. As the company prepares to release its 2Q results on December 19, Wetherbee has made some minor adjustments to his estimates but remains bullish on the stock.
Wetherbee’s 2Q and FY24 estimates now stand at $4.51 and $18.75, respectively. These figures are 9% and 4% higher than the Street’s expectations. The analyst believes that macro factors and DRIVE cost initiatives are progressing as expected, and this, combined with better LTL (less-than-truckload) results and an extra Cyber-Week day, should result in another strong quarter for FedEx.
Furthermore, Wetherbee believes that FedEx is on track to exceed the top end of management’s EPS range for the year. However, the question remains whether the company will raise its guidance. Wetherbee is uncertain about this, especially considering the fundamental headwinds facing the transportation industry.
Although FedEx has performed well, Wetherbee suggests that sentiment among investors is more balanced compared to the previous quarter. Therefore, he believes that a beat and maintain scenario may be the base case for most investors. Nevertheless, Wetherbee still sees the setup as favorable.
In terms of price action, FedEx shares were trading higher by 0.18% at $256 at the time of writing. Overall, Wetherbee’s report highlights his confidence in FedEx’s performance and the potential for further upside. Investors will be eagerly awaiting the company’s 2Q results to see if they meet or exceed expectations.
