Why This Analyst Remains Cautious On FedEx Ahead Of Q2 Results

  • FedEx Corporation FDX is scheduled to announce its second-quarter financial results after the market closes on Wednesday.
  • On Monday, RBC Capital Markets analyst John Barnes shared a preview of the results.
  • According to the report, the firm remains cautious on the stock going into earnings, even though the shares have experienced a substantial pullback as the date approached.
  • In a report issued Monday, analysts at RBC Capital Markets shared a preview of FedEx’s second-quarter fiscal 2016 earnings call. The firm is modeling revenue of $12.4 billion and earnings of $2.55 per share, versus consensus of $12.435 billion and $2.53 per share. Moreover, despite being slightly below consensus on the revenue front, the experts believe “there could be downside risk given the softening economy.”

    Related Link: FedEx, UPS Now Riding On The Holiday Tracks

    The research note pointed out a few elements to keep in mind ahead of the earnings call:

    • 1. Positive commentary on the peak season, well underway, can be expected.
    • 2. Investors shouldn’t be surprised by a reduction in fiscal 2016 guidance – in line with the wider industry.
    • 3. Shareholders shouldn’t be expecting any incremental color on the company’s plans to integrate TNT.
    • 4. “Pullback in the shares suggests weaker results and guidance baked in.”

    Consequently, RBC analysts reiterated a Sector Perform rating and $157 price target on shares of FedEx.

    Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.

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    Posted In: Analyst ColorEarningsNewsPreviewsReiterationAnalyst RatingsTrading IdeasJohn BarnesRBCRBC Capital Markets
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