FedEx Corporation (FDX) is considered a barometer from the health of the economy, especially in the age of online shopping. The more boxes shipped from online shopping, the healthier the economy; so, goes the theory.
As a result, Wall Street and astute investors pay close attention to FDX’s earnings’ results as a sort of weather forecast for the months ahead.
FedEx will release its first quarter earnings for fiscal year 2024 after the close of regular hours on Wednesday, September 20. (1) Analysts forecast earnings per share (EPS) of $3.71 compared to $3.44 for the same quarter last year. Revenue, however, is expected to decrease to $21.79 billion from $23.58 billion in last year’s first quarter. (2)
Rising EPS in the face of declining sales typically means Wall Street sees better net margins, which does open the door to a bearish surprise if management could not cut costs as expected, in our opinion.
FDX’s price has been under pressure since mid-July, shedding about $20. As you’ll see on the chart below, its fall has been defined by a fairly tight trading range. There are signs the shares could be readying for a rebound. Relative Strength (RSI) is flattening out and tilting a little towards the sun and volume is waning as the price falls.
If earnings and guidance are better than expected, FDX shares could break the downtrend with the 50-day moving average of $259.32 as the most logical destination, perhaps resistance in the mid-$260s on the upper end, in our view.
Bad news could push FDX below the trading channel to support at $245, which is a key technical point. Anything below that, and $230 might come into focus quickly.
Trading earnings is highly risky and only for the most aggressive investors who can afford to lose a lot of money in short timeframes.
1 – https://investors.fedex.com/news-and-events/upcoming-events/default.aspx
2 – https://finance.yahoo.com/quote/FDX/analysis?p=FDX