Economic bellwether rallies due to earnings

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FedEx, ,FDX) is set to report late Thursday for the third quarter with demand issues under scrutiny as the delivery giant continues to slash costs. FDX stock gained momentum in Thursday’s premarket action.


“Any demand recovery through 2024 would be a clear headwind to performance given the company’s leverage to global growth,” Baird analyst Garrett Holland wrote in a March 9 note to clients.

Meanwhile, FedEx’s Expedition program is targeting more than $4 billion in annual structural cost reductions by fiscal year 2025.

FedEx is a leader in global economic outlook and industrial production.

FedEx Income

Estimate: Analysts polled by FactSet expect EPS to decline 41%, year over year, to $2.71. Revenue declined by 3.7% to $ 22.718 billion.

Result: Check back Thursday after the market close for FedEx earnings.

Outlook: Wall Street predicts 2023 EPS of $13.58, a 34% decrease from 2022. That’s just above the $13.50 midpoint of management’s guidance of $13-$14 issued in December.

FDX Stock, UPS Stock

Shares of FedEx rose 2.1% in premarket trading on the stock market today. They fell 1.3% to 195.30 on Wednesday, falling further below the 50-day moving average and the 200-day lower line.

The MarketSmith chart shows that after hitting the top in early February, the FDX stock has a flat base with a 217.48 buy point. But the shares are at the bottom of consolidation.

On February 2, FedEx stock jumped when the shipper announced additional job cuts as part of its larger cost-cutting effort.

FDX stock’s relative strength line is rising after last year’s decline.

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UPS ,UPS) rose nearly 2% in early Thursday trading. Shares were down 0.4% on Wednesday, near its 50-day and 200-day lines. UPS stock has a 194.01 buy point from a flat base within a long, deep consolidation.

FedEx turnaround effort

FedEx continues to work on the turnaround.

“We believe the company has opportunities to improve profitability, having struggled in recent years thanks to heavy growth investments,” said Edward Jones analyst Matt Arnold.

Last quarter, its fiscal second quarter, FedEx’s earnings topped out as the ground and freight businesses improved profitability. But the profit margin of the express business saw a sharp decline due to lower shipment volumes.

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