FedEx earnings miss estimates but the stock could make a comeback?

on Mar 18, 2022
  • FDX fell 5% as Q3 2022 EPS of $4.59 missed estimates.
  • The company reaffirmed its December guidance EPS of $20.50 to $21.50 in FY22.
  • FDX is jumping from support amid the stock decline following the missed earnings.

Shares of FedEx Corporation (NYSE:FDX) slipped more than 5% on Friday after reporting earnings per share of $4.59 in Q3 2022, below estimates of $4.64.

The net income and revenue in the third quarter of 2022 still rose by almost 30% and 10%, respectively.

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Despite the market decline in the stock, the company’s own guidance shows that FDX is not an outright sell. The company reaffirmed its FY22 earnings per share of between $20.50 to $21.50. The guidance is a testimony that FedEx believes in its own profitability story.

As the Omicron-related impacts wane, FedEx could be on its way to reclaiming the previous highs. The technical analysis also supports a higher price for FDX.

FDX trades at the key support as earnings disappoint

Source – TradingView

Technically, FDX support is established at $219. At the current price of around $217, the stock is trading slightly below the support but not sufficient enough to be called a breakout. It should be noted that the stock was trading at a high of $229 the previous day in a bullish momentum that was developing before the earnings.

Due to the below-estimate earnings, FDX has entered a moment of indecision, as shown by the price drop to and slightly below the support. However, the stock is trading significantly higher compared to a low of $200 earlier this month.

Concluding thoughts

Although FedEx reported below-estimate earnings, it still had a robust quarter, as shown by the rise in earnings. The stock is trading at a key level as it takes a break following the earnings.

We are still optimistic that the stock will regain the bullish rally and rise up to $242. However, the price and daily candlestick should close above the support of $219 to consider a bullish rally imminent.

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