Yahoo Finance Will FedEx Corporation’s (NYSE:FDX) Earnings Grow Over The Next Few Years?
FedEx Corporation’s (NYSE:FDX) announced its latest earnings update in May 2018, which indicated that the company benefited from a large tailwind, eventuating to a high double-digit earnings growth of 52.56%. Below, I’ve laid out key growth figures on how market analysts view FedEx’s earnings growth trajectory over the next couple of years and whether the future looks even brighter than the past. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.
See our latest analysis for FedEx
Market analysts’ consensus outlook for the coming year seems pessimistic, with earnings falling by -1.15%. But in the following year, there is a complete contrast in performance, with arriving at double digit 15.79% compared to today’s level and continues to increase to US$5.68b in 2021.
Even though it’s informative understanding the growth rate year by year relative to today’s value, it may be more beneficial evaluating the rate at which the earnings are rising or falling every year, on average. The advantage of this method is that it removes the impact of near term flucuations and accounts for the overarching direction of FedEx’s earnings trajectory over time, which may be more relevant for long term investors. To compute this rate, I put a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 7.68%. This means, we can presume FedEx will grow its earnings by 7.68% every year for the next couple of years.
Next Steps:
For FedEx, I’ve compiled three essential factors you should look at:
Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
Valuation: What is FDX worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether FDX is currently mispriced by the market.
Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of FDX? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
