We recently issued an updated report on FedEx Corporation FDX.

FedEx's fourth-quarter fiscal 2020 results were aided by increase in e-commerce sales during the COVID-19 pandemic. The need for door-to-door delivery of essentials is rising thanks to pandemic-induced social-distancing protocols, quarantine and lockdowns. Notably, FedEx Ground revenues have surged 20% year over year in fourth-quarter fiscal 2020 owing to residential delivery volume growth. Higher Ground revenues are partly offsetting the coronavirus-related adversities.

To combat the COVID-19 related headwinds, the company has undertaken several cost-reduction initiatives including temporary workforce reductions, deferring non-essential investments and reducing discretionary spending. For fiscal 2021, the company anticipates capital expenditures of approximately $4.9 billion, which indicate a 17% decline from fiscal 2020 levels.

However, low commercial volumes due to large-scale business closures hurt FedEx's revenues in fourth-quarter fiscal 2020. With the pandemic continuing, the situation remains uncertain. Although commercial volumes have been improving since May, yet it is below year-ago levels.

FedEx Corporation Price

FedEx Corporation price | FedEx Corporation Quote

Persistent weakness in FedEx’s primary revenue generating segment, FedEx Express, is another concern. FedEx Express revenues have declined 5% year over year in fiscal 2020 due to 5% reduction in package revenues and 6% fall in freight revenues.

Zacks Rank & Key Picks

FedEx currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Zacks Transportation sector are Canadian Pacific Railway Limited CP, TFI International TFII and Teekay Tankers Ltd. TNK. All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings (three to five years) growth rate for Canadian Pacific, TFI International and Teekay Tankers is estimated at 7.5%, 4.1% and 3%, respectively

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FedEx Corporation (FDX) : Free Stock Analysis Report
 
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