FDX - FedEx Q4: Turnaround Taking Hold

2024-07-01 05:13:48 ET

Summary

• FedEx while long struggling with operational efficiency, shown in losing USPS contract to UPS, is leading to cost-cutting measures that helped revenue increase in Q4.
• Recent earnings report beats expectations, showing increased net income, revenue, and operating income, leading their stock to move higher this week.
• FedEx's valuation suggests undervaluation compared to sector, with potential for significant upside if turnaround continues successfully.

Investment Thesis

I believe the ongoing struggles FedEx ( FDX ) has faced are mainly centered around their competitive operating efficiency, as exemplified by the U.S. Postal Service's decision to expand United Parcel Service ( UPS ) as their primary air cargo provider in April 2024 ....

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