What to Expect When FedEx Reports on Tuesday

FedEx Corp. (NYSE: FDX | FDX Price Prediction) is scheduled to release its fiscal first-quarter financial results after the markets close on Tuesday. The consensus estimates are calling for $3.17 in earnings per share (EPS) and $17.07 billion in revenue. The same period of last year reportedly had $3.46 in EPS and $17.05 billion in revenue.

Back in August, FedEx announced that it will end its ground-delivery contract with Amazon at the end of the month. This poses a big question about what’s next for the FedEx-Amazon relationship. And it comes a couple of months after FedEx announced that it killed part of its deal to deliver packages for Amazon via air transportation.

Back in June, FedEx specifically, said that it is ending its express U.S. shipping contract, which only affected air services. At that time, FedEx said it was a “strategic decision” that would not affect its other contracts with Amazon, although this does not seem to be the case now.

Also at that time, FedEx noted that less than 1.3% of its total revenue was attributable to e-commerce giant during the 2018 calendar year.

Amazon combated FedEx’s plan in June by announcing a Delivery Service Partners program in an effort to attract entrepreneurs who can create their own local delivery networks with up to 40 vans each. There has been no word yet on how Amazon will combat this most recent strategic move by FedEx.

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Excluding Monday’s move, FedEx had underperformed the markets, with the stock up about 8% year to date. In the past 52 weeks, the stock was down 31%.

A few analysts weighed in on FedEx ahead of the report:

• Morgan Stanley has a Hold rating with a $131 price target.
• Goldman Sachs has a Buy rating and a $200 price target.
• Berenberg Bank has a Hold rating with a $175 target price.
• Oppenheimer has an Outperform rating with a $176 target.
• Deutsche Bank has a Buy rating.
• Stephens rates it at Buy with a $210 target price.

Shares of FedEx traded down about 0.5% on Monday, at $173.21 in a 52-week range of $147.82 to $259.25. The consensus price target is $187.96.
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