PreMarket Prep Stock Of The Day: Buying FedEx On The Dip After Q3 Earnings

Not all companies follow the same fiscal year, and one of those companies is FedEx Corp FDX, which just reported third-quarter earnings.

The corresponding price action makes FedEx the PreMarket Prep Stock of the Day.

Short-Term FedEx Price Action: Whereas the S&P 500 index made its recent low for the move on Feb. 24, the issue did not bottom until March 8 at $199.03. That is the first time the issue has traded sub-$200 since August 2020.

The issue caught a bid with the remainder of the market and reached its highest level since making that low on Thursday at $229.42. It backed off from that high to end the session at $227.98.

FedEx's Mixed Q3 Report: After the close on Thursday, the company reported quarterly earnings of $4.59 per share, which missed the analyst consensus estimate of $4.64 by 1.08%. This is a 32.28% increase over earnings of $3.47 per share from the same period last year.

The company reported quarterly sales of $23.6 billion, which beat the analyst consensus estimate of $23.44 billion by 0.68%. This is a 9.72% increase over sales of $21.51 billion in the same period last year.

PreMarket Prep's Take On FedEx: When the issue was being covered on the show, it was traded in the red by over $7 at the $220 area. The author of this article analyzed the stock from a potential buyer's perspective. In other words: how did FedEx look for those who missed the move off $200 and were interested in purchasing shares of the issue?

Since the issue had roughly a $30 rally off the low, a 50% retracement to the $215 level may present itself as a lower-risk entry on the long side. From a risk-reward standpoint, a potential exit could be at the $210 area.

Co-host Dennis Dick stated: “If you are underinvested, you may want to consider buying the issue on the pullback.

FDX Price Action: After a lower opening price, right at Thursday’s low, the issue continued in that direction Friday. It easily breached Wednesday’s low ($218.75), but found support above Tuesday’s low ($211.93) and reversed course.

The stock was down 5.04% at $216.50 in Friday afternoon trading. 

The discussion on the issue from Friday’s show can be found here.