FedEx Corporation (FDX) Stock: Continues Bullish Trend After Earnings

FedEx Corporation (NYSE: FDX)

FedEx Corporation had an incredible day in the market yesterday following the release of its Q2 FY16 earnings report. Today, the gains continue. Now investors are starting to wonder how long we can expect to see gains from the stock. Today, we’ll take a look at earnings, discuss what we’re seeing from FDX today and talk about what we can expect to see from the stock moving forward.

FedEx Posts Solid Earnings

As mentioned above, FDX released earnings for the second quarter of fiscal 2016 yesterday. The results led to investor excitement as they came in well ahead of expectations. Here’s what we saw from the report:

  • Earnings – In terms of earnings per share, FDX reported earnings in the amount of $2.58 per share for the second quarter. This came in $0.07 ahead of the expected $2.51 per share.
  • Revenue – FedEx also produced revenue for the quarter that came in ahead of earnings. Overall, consensus estimates showed expectations of $12.401 billion in revenue for the quarter. However, the company actually produced $12.5 billion in revenue for Q2.

As you can see from the above data, FDX posted solid results. In a statement, Frederick W. Smith, FDX Chairman, President and CEO had the following to offer:

FedEx Corp. posted solid earnings despite continued weakness in industrial production and global trade, and we are making impressive progress toward our goals to increase margins, earnings per share, cash flows, and returns on invested capital… A record number of holiday shipments, fueled by the steady rise of e-commerce are flowing through the FedEx global networks, and we greatly appreciate the dedication of our 340,000 team members around the world who are delivering outstanding service to our customers.”

How The Market Reacted To The News

As mentioned above, we saw a strong positive reaction from FDX in yesterday’s trading session. The investor excitement caused by earnings is fueling more bullish activity today. Currently (10:58), FDX is trading at $153.07 after a gain of 2.85% so far today.

What We Can Expect To See Moving Forward

Moving forward, I have an overwhelmingly bullish opinion of what we can expect to see from FDX. While the earnings report was incredibly positive, for me, the bullish opinion comes from a key point outlined by the CEO in his statement. The reality is that consumer habits are changing quickly. More people are shopping online today than ever before. As a result, more shipments are being made than ever before. This trend is likely to continue, leading to more and more gains for companies like FDX and many others. With that said, as online sales continue to grow, we see a strong correlation in the growth of shipping companies. Because FDX is one of the most trusted shipping companies around the world, I’m expecting that they are going to take a large share of this growth, ultimately leading to long run gains in revenue, earnings and of course the stock price.

What Do You Think?

Where do you think FDX is headed moving forward? Let us know your opinion in the comments below.

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