FedEx (FDX, $227.14) headlines this week’s light earnings calendar, with the shipping giant slated to report its fiscal fourth-quarter results after the June 23 close.
FDX made waves last week when it announced a massive dividend hike – boosting its quarterly payout by 53% to $1.15 per share. Additionally, the company said it would add three new board members as part of a deal with activist investor D.E. Shaw and unveiled a redesigned executive compensation aimed at boosting overall share performance.
The industrial stock jumped more than 14% on that news, but remains 12% lower on a year-to-date basis.
Can FedEx’s upcoming earnings report help shares chip away at this deficit even more?
While macroeconomic uncertainty and execution have remained headwinds, the stock is largely washed out and there is near-term upside potential, says Wells Fargo analyst Allison Poliniak-Cusic, who has an Overweight (Buy) rating on FedEx stock.
As for FDX’s fiscal fourth quarter, Poliniak-Cusic believes labor and elevated network are still drags, but these should be offset by a “meaningful” compensation tailwind. As such, the analyst expects FedEx to post a beat this time around.
Analysts, on average, are expecting FedEx to report earnings of $6.88 per share, up 37.3% year-over-year (YoY). Revenue is projected to rise 8.4% from the year-ago period to arrive at $24.5 billion.
KB Home to Show Earnings Growth, Despite Signs of Slowing Housing Market
Homebuilders have been on Wall Street’s radar recently amid signs the housing market is finally starting to cool.
Case in point: The Commerce Department last Thursday said housing starts fell 14.4% month-over-month in May to an annual rate of 1.55 million units – the lowest since September 2020. Building permits also took a notable nosedive.
Industry trends will remain in focus when KB Home (KBH, $25.59) reports its fiscal second-quarter earnings report after the June 22 close.
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“Homebuilders surveyed [in the National Association of Homebuilders/Wells Fargo home market index] say appraisal values are getting tough to qualify for larger mortgages,” says CFRA Research analyst Kenneth Leon, who recently downgraded KBH stock to Hold from Buy on rising interest rates and an expected decline in homebuying demand. “Demand may taper in the next 12-18 months, and we think KBH selling communities have higher risk.”
But Wedbush analyst Jay McCanless remains bullish on KBH ahead of earnings, with an Outperform (Buy) rating.
Based on preliminary operating data KBH released on June 7, McCanless believes the homebuilder was at the high end of closing guidance for the quarter. “We suspect the main catalyst was some closings that slipped to …….