FedEx Q3 Preview

FedEx Corporation

reports fiscal Q3 earnings results Wednesday before the market open. The Street expected adjusted EPS of $1.87 on revenue of $11.79 billion. For Q4, adjusted EPS was estimated at $2.86 on revenue of $12.31 billion. Full year EPS was expected at $8.97 on revenue of $47.74 billion. For 2016, the Street estimated full year adjusted EPS at $10.98 on revenue of $50.47 billion. Oppenheimer analyst Scott Schneeberger expected Q3 adjusted EPS of $1.84 with full year adjusted EPS of $8.95. Schneeberger also increased FY 2016 estimated adjusted EPS from $10.90 to $11.10, above the current consensus of $10.98. Schneeberger anticipated "FedEx to have capitalized on the strong e-commerce trends this past holiday season, which should support continued strong performance in its relatively high-margin FedEx Ground segment. Notably, holiday season e-commerce spending increased 15 percent y/y from 11/1/14-12/31/14 per comScore data." Oppenheimer reiterated an Outperform rating and $200 price target on the stock. Deutsche Bank analyst Robert Salmon maintained a Buy rating and $210 price target and believed that FDX was "poised to deliver solid FQ3 results on Wednesday morning given the tailwind from its profit improvement plan at Express, a strong 2014 holiday e-commerce season, and continued growth at Ground, its most profitable segment." Salmon estimated EPS at $1.88 for Q3 and raised full fiscal year 2015 EPS from $9.04 to $9.06 on revenue of $48.406 billion. For 2016, Salmon estimated EPS at $10.98, in line with consensus, while 2017 EPS was estimated at $12.74. Over the past three months, the stock was up approximately 1.6 percent and had traded between approximately $167 and $181. Ahead of its earnings release, FedEx Corporation traded at $177.42 on Monday, up 2.37 percent.