FedEx stock price analysis ahead of earnings: buy or sell?

FedEx stock price has retreated in the past few weeks, moving from the year-to-date high of $390 in February to $350.

This retreat happened as fuel prices rose and supply chain disruptions rose.

So, will the stock rebound or continue falling as it releases its financial results later this week?

FedEx to publish its results this week 

FedEx, a company seen as a barometer of the global economy, will publish its financial results on Thursday this week.

The most recent results showed that the company's business made some modest growth in the second quarter of the year.

Its revenue rose by 7% to $23.5 billion in the second quarter, helped by the rising volume in the domestic market.

The operating income rose by 17% to over $1.6 billion, while its operating margin rose by 60 basis points to 6.9%.

This margin growth happened as the company continued implementing its cost-cutting measures.

Analysts believe that the company’s business continued doing well in the last quarter, with its revenue rising by 5.94% YoY to over $23.4 billion.

They also expect the annual revenue will be $92.75 billion, up by 5.7% YoY.

READ MORE: Morning brief: Asia stocks up, FedEx sues US over tariff refunds

The challenge, however, is that the company’s business is seeing higher costs as energy costs jump. Data shows that crude oil prices have jumped, with Brent, the global benchmark, rising to over $105.

The West Texas Intermediate (WTI) crossed the important resistance level at $100, pushing its jet fuel prices up by over 60% from a month earlier.

In a recent statement, the company said that its business was prioritising premium growth in high-margin verticals, scaling its digital and AI capabilities.

Its main focus will be on premium B2B and specialised B2C segments.

It also aims to leverage its two petabytes of data processed daily and its physical network.

As a result, FedEx aims for its revenue to jump to $98 billion in 2029, with its operating income rising to over $8 billion. Its adjusted free cash flow is expected to jump to over $6 billion.

FedEx stock price technical analysis 

FedEx stock chart | Source: TradingView 

The daily chart shows that the FDX stock price has dropped from the year-to-date high of $391 in February to the current $350.

It has moved slightly below the Weak, Stop & Reverse level of the Murrey Math Lines tool at $360.

On the positive side, the stock remains slightly above the Strong pivot reverse level of the Murrey Math Lines tool.

It has also remained above the 50-day Exponential Moving Average (EMA) and the 23.6% Fibonacci Retracement level.

Therefore, there is a possibility that the FedEx stock price will rebound, potentially to the year-to-date high of $390. Such a move will be a 10% increase from the current level.

On the flip side, a drop below the 50-day moving average will point to more downside, potentially to the 50% Fibonacci Retracement level at $290.