FedEx (FDX) is posting fiscal fourth quarter earnings next week, and Barclays analyst Brandon Oglenski sees good and bad news ahead. In particular, pension costs could weigh. But low fuel prices should help the company. The good, in the end, should outweigh the bad, he argues.
“FedEx fourth-quarter earnings will likely prove another volatile event contingent on forward guidance. Fuel is down, pension is moving higher and the company appears to be practicing greater capacity discipline; all of which will play on the outlook. International demand remains the missing upside component and we don’t expect much upbeat management commentary along that front. However, cost reductions and stable market trends suggest FDX will expand profitability even with subdued global package growth. We expect guidance in the range of current consensus is achievable in the present environment, making for an attractive risk-reward in the shares.”
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