FedEx Stock: Oversold, Undervalued By TipRanks
FedEx (NYSE 🙂 is an American multinational courier company that has grown in prominence due to e-commerce.
The stock is a good investment for me. TipRanks has FedEx stock chart charts.
FedEx is in oversold territory with an RSI reading of 17.1. Any reading below 30 indicates that FedEx is overbought. Anything above 70 signifies overbought.
FedEx is a victim of pandemic supply chain disruptions. However, if you look at FedEx’s year-overyear revenue growth (21.2%) investors might overreact.
Furthermore, FedEx also has year-over-year EBITDA and normalized net income growth of 66% and 161.6%, respectively. FedEx has a three-year growth rate of 11.9% and 10.2%, which adds to the existing substance.
Value at Play, Balance Sheet Liquidity
FedEx has been able to reduce its leverage since June 2020 from more than 60% to just 29.3%. The FedEx has also seen an astonishing 10.5-fold increase in its interest coverage ratio.
FedEx’s cost of capital has dropped by 45 percent since 2019 and its ROIC increased by about 5%. This is despite the fact that tangible stock price results have yet to reflect the trending COVID-19 disruption in supply chain.
There’s much value at play for investors; FedEx’s P/E ratio is currently trading 18.1% below its five-year average.
Furthermore, the stock’s price-to-sales and price-to-cash-flow ratios are trading below its sector average by 57.5% and 56.4%, respectively.
FedEx stocks are a great investment. However, investors should be aware that they have a significant difference between their fair value and current market prices.
Valor for Shareholders
FedEx stock had negative earnings-per share during February 2020. But, since then it has risen to a ratio of 14.2.
The price of a stock is often correlated with the EPS. FedEx did well in 2020 but there was a significant gap between its stock price and EPS for 2021. This leaves an important gap that needs to be filled.
Wall Street Take
Wall Street believes FedEx is a strong buy, with an average price target at $307.05, which suggests upside potential of 40%.
The stock has received 17 Buy ratings over the past three months. There have also been four Hold ratings and no Dell ratings.
The Final Word
FedEx has been unfairly overpriced, but is currently undervalued due its strong financial results.
Wall Street believes that the stock holds significant upside potential.
Disclosure: Steve Gray Booyens didn’t hold any position at the time this article was published.
Disclaimer: Information in this article does not necessarily reflect those of TipRanks. TipRanks does not warrant the accuracy, reliability or completeness of this information. The article does not constitute a solicitation or recommendation to buy or sell securities. This article is not intended to provide advice on legal, professional investment or financial matters. TipRanks or its affiliates are not responsible for the contents of this article. Any action you take based on the information is your responsibility. TipRanks and its affiliates do not endorse or recommend this link. Performance in the past is no guarantee of future performance, price or results.