Q1 Preview: FedEx (FDX) Analysts Cautiously Optimistic as Economic Headwinds Weigh

FedEx (NYSE: FDX) shares are trading lower heading into its first-quarter earnings report, expected out Thursday before the market opens.

The Street is looking for FedEx to report earnings of $1.47 per share on revenue of $10.34 billion. If earnings can hit these marks, quarter-over-quarter growth would be 16 percent while year-over-year growth would be 22.5 percent.

Shares fell 15.8 percent through the quarter and are down 7.4 percent since. The stock is down 21.4 percent on the year and has traded in a range of $71.33 to $98.66 over the last 52-weeks.

Data from Bloomberg has 20 analysts with a Buy rating, 9 at Hold, and none suggesting to Sell. The Street's average price target is $104, with a low of $78 and high of $123.

Analyst Comments

• Deutsche Bank is modeling for earnings of $1.42. Sees "recent mediocre freight demand and some moderation in Chinese exports to constrain FDX's FQ1 earnings driving potential downside to current Consensus expectations."
  
  "We would not be surprised if FDX reduced its FY2012 guidance (currently $6.35 to $6.85) given global and domestic economic headwinds despite the recent decline in fuel prices which should act as a tailwind. We believe investors will give FDX a pass if it lowers its FY2012 hurdle rate given recent economic uncertainty and stock market volatility."
  
  Maintains Buy and $117 price target.
  
  
• J.P. Morgan said, "We believe that FDX is likely to remain on a path of constructive pricing performance within its domestic package business and we also note that its cost trends are likely to be more favorable than they were in F11 when FDX faced significant inflation in pension expense, aircraft maintenance, and other compensation costs. However, we also recognize that FDX’s global air express network has meaningful operating leverage and FDX’s earnings performance is sensitive to the pace of growth in the US and global economies. Our F2012 EPS is based on cautious underlying volume assumptions...Assuming that we do not enter a sharp recession, we believe FDX has significant upside potential in the medium term.."
  
  Firm maintains an Overweight rating and $105 price target.
  
  Stay tuned to StreetInsider.com's EPS Insider section to see our analysis of the highly-anticipated quarterly results within seconds of their release. Click here for a snapshot of FedEx's Income Statement, and track what FedEx has been doing over the last several quarters.

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