FedEx Corporation (NYSE: FDX) shares have weakened from their record highs above $319 registered in May 2021, and the current price stands around $292. The risk of further decline is still not over, and if the U.S. stock market enters a more significant correction phase, the share price could be at much lower levels.
Fundamental analysis: FedEx expects strong momentum in the 2022 fiscal year
FedEx shares continue to trade below the $300 resistance even though the company reported better than expected fourth-quarter results in June. Total revenue has increased by 29.9% Y/Y to $22.6 billion, while the GAAP EPS was $6.88 (beats by $1.94).
The revenue growth was primarily driven by the strong increase in business-to-business shipments and a 14% rise in revenue per package. Operating income rose 9% Y/Y to $1.97 billion during the quarter, and the company expects earnings per share to be between $20.50 to $21.50 for the 2022 fiscal year.
“We expect continued strong momentum in fiscal 2022, and our investments are focused on the areas of greatest growth and highest returns, like e-commerce, to position us for sustained long-term growth in earnings, cash flows, and returns,” said CFO Michael Lenz.
This month FedEx announced plans to invest $100 million in SoftBank-backed Indian logistics firm Delhivery, which will unlock India’s international trade potential. FedEx and Delhivery will enter into a long-term commercial agreement, and according to this agreement, FedEx will be responsible for international export and import services while Delhivery will focus on selling FedEx Express’ international products and services in India and also provide delivery and pick-up services across the country.
FedEx’s 1% dividend looks safe, and the company’s management remains very optimistic about the upcoming quarters in terms of
