So far 2017 has been yet another record high-hitting year for FedEx, even if it took the stock a bit of time to break out of a trading rut. Having fallen from $200 last December following a poorly received Q2 report, FedEx spent the first 5 months of the year bouncing between $185 and $195, with its third quarter figures towards the end of March failing to help the company escape this bracket.
That’s because FedEx revealed earnings of $2.35 per share, a way away from the $2.62 per share forecast by analysts and 6% lower than Q3 2016. Revenue, on the other hand, just about beat forecasts, climbing 18% to $15 billion against the $14.99 billion expected, though that couldn’t compensate for the sharp drop in EPS.
It wasn’t until June that FedEx began to gather momentum, in the run up to its fourth quarter figures. That release was a huge improvement on what it had posted in March. Earnings per share came in at £4.25, far higher than the $3.88 forecast, with revenue also beating expectations at $15.7 billion. This helped propel the stock to a fresh all-time high by mid-July, where it grazed $220 for the first time.
From that peak, however, FedEx soon fell thanks to an update on July 17th that stated a cyber-attack at its TNT Express (OTC:TNTEF) division in June would have a ‘material’ impact on its financial results. This forced the stock back below $215, before a statement from the Federation of Small Businesses claiming that small firms were being ‘crippled’ by the ongoing issues at TNT took FedEx to a 2 month low of $203 in mid-August.
Since then FedEx has bounced back from those levels, though it did receive a knock last week as UBS downgraded the stock due to the lingering fallout of the cyber-attack. FedEx Corp now sits at a current trading price of $214.80.
Of course heading into Tuesday’s Q1 2018 update the main question surrounds the cost of the cyber-attack, with some estimates placing the hit between $400 million and $600 million. Yet in terms of its key figures things look good, with analysts are expecting a 7% rise in EPS to $3.11 alongside a 4.8% increase in revenue to $15.37 billion.
FedEx Corp (NYSE:FDX) has a consensus rating of ‘Buy’ with an average target price of $224.40.
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