Investors Should Tweak Estimates on Shipping Companies Higher On Record Online Sales Volumes (FDX), (UPS)
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With a record number of shoppers attacking the Internet this holiday season, shipping companies such as FedEx (NYSE: FDX) and UPS (NYSE: UPS) look to gain substantially.
More and more people are using the Internet to shop as many stores now offer the same deals online as they do in store. Online shopping volumes rose 35 percent on Black Friday from a year ago and Reuters reports that shopping volumes are expected to increase 15 percent on cyber Monday, today, to 122.9 million customers.
Another quasi-company looking to gain substantially from this growing trend is the United States Postal Service, which has been engulfed in bankruptcy fears.
Amazon.com (Nasdaq: AMZN) is noted to have the most traffic with over 50 percent more visitors than any other online retailer site. The company has no contracts with any individual distributor and uses all major carriers when shipping. Shares of AMZN are trading 5.8 percent higher on the day after closing down on Black Friday.
The price of oil will be weighing more heavily on distribution and shipping companies this year over last. Light crude futures are trading around the $98.90 range today and were trading around the $89 range a year ago. With the number of online items being shipped this year expected to increase substantially, it will be interesting to see the difference in margins and how management has been able to control costs from last year.
Currently, Bloomberg has it that 22 financial firms rate shares of UPS at Buy while 6 have Hold ratings on the shares. The price target on shares of UPS ranges from $70 to $105. Shares of UPS are up 2.96 percent on the day. Bloomberg also reports that 21 analysts rate shares of FDX as a Buy, 6 rate them as a Hold, and 1 rates them as a Sell. Analysts price targets on shares of FDX range from $75 to $115. Shares of FDX are trading up 5.07 percent on the day.
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More and more people are using the Internet to shop as many stores now offer the same deals online as they do in store. Online shopping volumes rose 35 percent on Black Friday from a year ago and Reuters reports that shopping volumes are expected to increase 15 percent on cyber Monday, today, to 122.9 million customers.
Another quasi-company looking to gain substantially from this growing trend is the United States Postal Service, which has been engulfed in bankruptcy fears.
Amazon.com (Nasdaq: AMZN) is noted to have the most traffic with over 50 percent more visitors than any other online retailer site. The company has no contracts with any individual distributor and uses all major carriers when shipping. Shares of AMZN are trading 5.8 percent higher on the day after closing down on Black Friday.
The price of oil will be weighing more heavily on distribution and shipping companies this year over last. Light crude futures are trading around the $98.90 range today and were trading around the $89 range a year ago. With the number of online items being shipped this year expected to increase substantially, it will be interesting to see the difference in margins and how management has been able to control costs from last year.
Currently, Bloomberg has it that 22 financial firms rate shares of UPS at Buy while 6 have Hold ratings on the shares. The price target on shares of UPS ranges from $70 to $105. Shares of UPS are up 2.96 percent on the day. Bloomberg also reports that 21 analysts rate shares of FDX as a Buy, 6 rate them as a Hold, and 1 rates them as a Sell. Analysts price targets on shares of FDX range from $75 to $115. Shares of FDX are trading up 5.07 percent on the day.
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