Investing

Earnings Previews: FedEx, Winnebago

Paul Ausick

Published: June 19, 2023 8:25 am

U.S. markets are closed Monday in observance of Juneteenth, and the flow of quarterly earnings reports all but dries up until after the July 4th holiday.

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Here’s a look at two companies that report quarterly results after markets close Tuesday or before they open Wednesday morning.

FedEx

For the year to date, shares of FedEx Corp. (NYSE: FDX) are up nearly 35%. Over the last 12 months, however, the stock is up just 3.6%. While sales haven’t been tanking, Revenue expectations have been trending down, and FedEx has missed those estimates in four consecutive quarters. The consensus for the company’s fourth fiscal quarter is lower still. Profits beat estimates in the last two quarters, primarily the result of cost-cutting. FedEx reports results after markets close Tuesday.

Analysts are somewhat bullish on the stock. Of 32 brokerages covering the stock, 14 have a Hold rating, and the rest have given the stock a Buy or Strong Buy rating. At a current price of around $233.50, the upside potential based on a median price target of $262.00 is 12.2%. At the high price target of $295.00, the upside potential is 26.3%.

The consensus fourth fiscal quarter revenue estimate is $22.66 billion, up 2.2% sequentially and down about 7.1% year over year. Adjusted EPS is forecast at $4.87, 42.8% sequentially, and down 29.1% year over year. For the full 2023 fiscal year that ended in May, analysts are currently expecting EPS of $14.84, down 28%, on sales of $90.96 billion, down 2.7%.

FedEx stock trades at a multiple of 15.7 times expected 2023 EPS, 12.7 times estimated 2024 earnings of $18.33, and 10.3 times estimated 2025 earnings of $22.76 per share. The stock’s 52-week range is $141.92 to $248.76. FedEx pays an annual dividend of $5.04 (yield of 2.16%). Total shareholder return for the past year was 6.60%.

Winnebago

Recreational vehicle maker Winnebago Industries Inc. (NYSE: WGO) has added more than 44% to its value over the past 12 months. Rival Thor Industries reported its April quarter sales were down sharply year over year and that rising interest rates are weighing on demand for the big-ticket rolling homesteads. But the news was good enough for investors to lift Thor and Winnebago stock prices by more than 9%. The company reports results before markets open Wednesday morning.

Of 12 analysts covering the stock, 6 have a Buy or Strong Buy rating on the shares, and the other 6 have given the stock a Hold rating. At a current price of around $64.40, the upside potential to a median price target of $66.00 is 2.5%. At the high price target of $86.00, the upside potential is 33.5%.

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Third fiscal quarter revenue is forecast at $960.7 million, up 10.9% sequentially and down 34.9% year over year. Adjusted EPS is forecast at $1.79, down 5.0% sequentially and down 56.7% year over year. For the full 2023 fiscal year ending in August, current estimates call for EPS of $7.53, down 45.5%, on sales of $3.74 billion, down 24.7%.

At the current share price, Winnebago stock trades at a multiple of 8.6 times expected 2023 EPS, 4.8 times estimated 2024 earnings of $7.60, and 5.1 times estimated 2025 earnings of $12.75 per share. The stock’s 52-week range is $44.25 to $70.53. Winnebago pays an annual dividend of $1.08 (yield of 1.68%). Total shareholder return for the past year was 47.03%.