Wall Street Weighs In On FedEx After Its Earnings Beat

• FedEx Corporation FDX announced its second quarter –fiscal 2016- financial results after the market closed on Wednesday.
• The company reported earnings of $2.58 per share on revenue of $12.453 billion, beating the Street's consensus estimate of $2.51 per share and $12.401 billion.
• So, let’s take a look at what some of the main Wall Street research firms are saying about the figures – and the company after the call.

FedEx beat the Street’s consensus expectations for the second quarter of fiscal 2016 on Wednesday afternoon. After the call, a few major Wall Street research firms weighed in on the results. Let’s take a look at what they said.

Deutsche Bank

Deutsche Bank analyst Robert Salmon described the beat as “impressive,” highlighting that upside was driven by robust results at Express (where EBIT rose 26 percent year-over-year even in spite of a 6 percent decline in revenue), accelerating Ground top-line, and a lower-than-anticipated tax rate. In addition, the expert pointed out, management reiterated its full-year EPS guidance of $10.40-10.90 “as it is benefitting from its profit improvement plan (PIP) and secular e-commerce growth.”

Consequently, the firm reiterated a Buy rating and $202 price target on the shares.

Credit Suisse

Analysts at Credit Suisse also believe the results were “solid” and thus reiterated an Outperform rating and $182 price target on the shares. Management noted that the company had been, so far, experiencing one of the best peak seasons in its history, driven mainly by a growth in e-commerce. Nonetheless, FedEx’s economic outlook for the US remains subdued; the company still forecasts FY15 US GDP growth of +2.4 percent, and FY16 US GDP growth of +2.6 percent.

Morgan Stanley

Finally, Morgan Stanley analysts were not as surprised as their peers. FedEx’s results came in in-line with the firm’s consensus expectations. However, the reiteration of fiscal 2016 EPS guidance came as “a pleasant surprise amidst an otherwise weak freight backdrop.”

The experts reiterated an Equal-Weight rating and $168 price target on the stock.

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