FedEx (FDX) is ending the week with a bang. The stock is up more than 8% Friday morning after the company beat the expectations for third-quarter earnings and announced a massive stock buyback program.

The company did disappoint in revenue, with a 2% slip year over year to $21.7 billion. However, the bottom line saw a 14% improvement to $879 million – up from $771 million this time last year. Diluted earnings per share of $3.86 were comfortably above the $3.43 analysts were expecting.

CEO and president Raj Subramaniam says that the company is right on track for the initiatives laid out last year – known as DRIVE. The plan calls for $4 billion in cuts by the end of fiscal 2025, and so far, so good. 

Subramaniam says that not only is the company finding ways to trim fat, but it’s still actively strengthening its value proposition while improving the customer experience. This is the third quarter in a row FedEx has grown operating income and improved its margin despite revenue declines.

FedEx and its shareholders are also excited about the approval of a $5 billion share repurchase program. The company already purchased $1 billion worth of shares in the last quarter and intends to add another $500 million to that tally in the near term. The goal for 2024 is to buy $2.5 billion in stock.

FDX has now gained 17% in the past month with the help of today’s 8% boost. It’s up 30% since this time last year. So, is there room for FDX to climb higher? After taking a look at this opportunity in the VectorVest stock analysis software, we think so. Here are three more reasons to consider buying FDX…

FDX Has Very Good Upside Potential and Timing With Fair Safety

VectorVest is a proprietary stock rating system that takes complex financial indicators and research and distills them into clear, actionable insights - saving you time and stress while empowering you to win more trades with less work.

You’re given all the information you need in 3 ratings - relative value (RV), relative safety (RS), and relative timing (RT). Each sits on its own scale of 0.00-2.00 with 1.00 being the average. This makes interpretation quick and easy.

Better yet, the system offers a clear buy, sell, or hold recommendation for any given stock at any given time based on the overall VST rating. Here’s what we’ve uncovered for FDX:

  • Very Good Upside Potential: The RV rating compares a stock’s long-term price appreciation potential (based on a 3-year price projection), AAA corporate bond rates, and risk. It offers much better insight than a simple comparison of price to value alone. The RV rating of 1.33 is very good for FDX. The stock is undervalued, with a current value of $357.45.
  • Fair Safety: The RS rating is a risk indicator. It’s calculated from an analysis of the company’s financial consistency & predictability, debt-to-equity ratio, business longevity, sales volume, price volatility, and other factors. The RS rating of 1.01 is fair for FDX.
  • Very Good Timing: The RT rating is based on the direction, dynamics, and magnitude of the stock’s price movement. It’s taken day over day, week over week, quarter over quarter, and year over year. The RT rating of 1.27 is very good for FDX, reflecting its performance in both the short and long term.

The overall VST rating of 1.21 is good and earns FDX a BUY recommendation in the VectorVest system. But before you do anything else, we encourage you to learn more about this opportunity with a free stock analysis - transform your trading strategy for the better today!

FedEx Corporation, FDX, Integrated Freight & Logistics, Industrials, Buy Recommendation, Featured

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VectorVest advocates buying safe, undervalued stocks, rising in price. FDX is up 8% Friday after reporting a solid third quarter performance in which it worked towards its goal of cutting costs without sacrificing on shareholder value and customer experience. The stock itself has very good upside potential, fair safety, and very good timing.

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