It has been a great few days for package carrier FedEx (FDX), with shares gaining right along for the last four days. What has caused this multi-day rally? A combination of factors, including its DRIVE initiative.
FedEx’s first quarter results are due out next month, and reports suggest there could be good news ahead. Current expectations look for adjusted earnings to hit $5.01 per share, which looks fantastic against $4.55 per share from a year prior, especially given current conditions on the ground.
As it turns out, FedEx’s DRIVE initiative—which sought to consolidate several FedEx services from ground to express under one banner, Federal Express Corporation—is paying off. And, with the spinoff FedEx Freight offering less-than-truckload services, that is giving FedEx new opportunities. With that comes improvement in the bottom line, and FedEx is reaping the rewards accordingly.
Committed to Growth in Vietnam
Interestingly, another major flash point for FedEx seems to be Vietnam. Back in June, the firm came out to “reaffirm (its) commitment to long-term growth” in the region. While FedEx had had a three-decade-strong presence in the country already, it came in with new plans for further growth, including expanding operations and building up its logistics.
This all sounds fine and well, if more like a lot of corporate weasel-speak. But then FedEx managed to affirm that it was not just a lot of talk with two new awards. At the HR Asia Awards 2024, FedEx walked away with the “HR Asia Best Companies to Work for” and “Sustainable Workplace” awards. And with those under its collective belt, that makes a good way to demonstrate its plans for improvement in Vietnam were not just talk.
Is FedEx Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on FDX stock based on 13 Buys and five Holds assigned in the past three months, as indicated by the graphic below. After a 9.21% rally in its share price over the past year, the average FDX price target of $322.53 per share implies 13.5% upside potential.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
