On Sept. 18, logistics giant FedEx (NYSE:FDX) reported its latest quarterly numbers, which gave investors reason for optimism. The company showed growth on both its top and bottom lines, as it continues to unlock efficiencies and cost-savings opportunities.
Revenue for the period ending Aug. 31 totaled $22.2 billion, which was an increase of nearly 3% from the same period last year. For the current fiscal year, the company is projecting top-line growth between 4% and 6%. More importantly, its net income rose from $0.79 billion a year ago to $0.82 billion this past quarter.
The company says it’s on track to spin-off FedEx Freight by June 2026. The leaner business model can help drive more efficiencies for the company as FedEx looks to reduce costs.
Unfortunately, with investors worried about the state of global economies and the potential a slowdown on trade may have on shipping volumes, FedEx hasn’t been a popular stock to own of late. Heading into earnings last week, the stock was down around 20% since the start of the year.
Based on analyst estimates, it’s trading at a forward price-to-earnings multiple of around 12, which is modest when you consider the average stock on the S&P 500 trades at more than 21 times its estimated future profits.
FedEx is a good long-term option to consider given that it is a market leader in the logistics industry. And while times are tough right now, by focusing on cost reductions and improving efficiency, these improvements can help lead to even better results in the future.
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