Fedex earnings discussion (DD)

by Omarthepanda

FedEx is announcing earnings next week dec 17th. The stock is at a good price but has a lot of variables playing for it. Here is what i have

  1. 15% electronics tarif will go in affect on Sunday night if no deal is achieved or if trump doesn’t push them. This will kill bestbuy, Apple ,…etc
  2. Fedex is tied to trade significantly. Every time China is mentioned this past year the stock moves( 2-6%). Last quarter the cut guidance down due to trade tensions and stock went from 175 ( which was recovering ) to 139 huge L this means that the bar is low. If they do raise guidance expect the stock to move up bigely
  3. It seems like news is mixed on the deal. A bit more optimistic. My opinion is trump needs the deal be re-elected. However this is only phase one. I am worried he might not push tarifs since job report last week was great and consumer spending is high. On the other hand pushing the tariffs will be positive news specifically for fedex it will also help trump have one less war to fight on the world stage ( he has France , China , Brazil all trade ) impeachment internally
  4. Online spending is sky rocketing this means returns will be high both of which will reflect positively for shipping.
  5. Most of the retailers (target , bestbuy and Macy’s ) shipped in UPS while few were fedex (Walmart)
  6. Fedex has strong flight shipping vs ups focuses on ground so maybe they have a partnership on some routes that I am kissing. I reached out to friends in Texas, Chicago and Minneapolis same companies used same carrier( UPS) keep in mind this isn’t a big sample size to determine the population at all )
  7. Fedex had a huge job shortage because of the holiday season. They had to hire somewhere around 10,0000 additional sorters . It reached a point where they had bus people accords state lines to their main facility

Still some DD left but I would appreciate some insight

 

 

Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence.