Yahoo Finance FedEx Stock Jumps on Q4 Earnings Beat: ETFs Likely to Gain
After the closing bell on Jun 25, transport bellwether FedEx FDX reported robust fourth-quarter fiscal 2024 results. The courier company outpaced earnings estimates and provided a strong earnings forecast for fiscal 2025.
Following the results, FDX shares jumped more than 15% in after-market trading on elevated volume. The smooth trading is also expected to be felt in the ETF world, especially for the ones with the highest allocation to FedEx. These include First Trust Nasdaq Transportation ETF FTXR, iShares U.S. Transportation ETF IYT, Pacer Industrials and Logistics ETF SHPP and ProShares Supply Chain Logistics ETF SUPL.
FedEx earnings per share came in at $5.41, surpassing the Zacks Consensus Estimate of $5.34 and improving from the year-ago earnings of $4.94. Revenues inched up 0.9% year over year to $22.12 billion and came in line with the consensus estimate (see: all the Industrials ETFs here).
For fiscal 2025, the shipping giant expects earnings per share in the range of $20.00-$22.00, reflecting confidence in its strategic direction and ongoing transformation efforts. It projects low to mid-single-digit revenue growth year over year, driven in large part by e-commerce and low-inventory levels. FedEx continues to expect to repurchase $2.5 billion of stock, including $1 billion during the first quarter of fiscal 2025.
The parcel company is in the process of consolidating the Express, Ground and Services units, a fundamental shift from the two-network system it has operated for decades. The Express segment has been hit hard by declining demand as customers opt to ship via ground instead of air amid sticky inflation. FedEx also hinted at a possible divestiture of its freight business, saying it’s assessing the unit’s place in the company’s portfolio.
ETFs in Focus
Let’s delve into each ETF below:
First Trust Nasdaq Transportation ETF (FTXR)
First Trust Nasdaq Transportation ETF offers exposure to the 41 most-liquid U.S. transportation securities based on volatility, value and growth by tracking the Nasdaq US Smart Transportation Index. FedEx occupies the second position in the basket with an 8.3% share. Automobiles, delivery services, airlines and railroads make up for double-digit allocation each.
First Trust Nasdaq Transportation ETF has amassed $36.3 million in its asset base and charges 60 bps in annual fees. The average trading volume is light at 3,000 shares. FTXR has a Zacks ETF Rank #2 (Buy).
iShares U.S. Transportation ETF (IYT)
iShares U.S. Transportation ETF tracks the S&P Transportation Select Industry FMC Capped Index, giving investors exposure to a small basket of 44 securities. Of these, FedEx takes the fifth spot and makes up 4.7% of the assets. Within the transportation sector, rail transportation takes the top spot with a 26.3% share, while air freight and logistics (20.6%), passenger ground transportation (19.6%) and cargo ground transportation (16.8%) round off the next three.
iShares U.S. Transportation ETF has $729.8 million in AUM while seeing a good trading volume of around 613,000 shares a day. The fund charges 40 bps in fees per year and has a Zacks ETF Rank #2 with a High risk outlook (read: 4 Industry ETFs to Play as US Manufacturing Grows in 1.5 Years).
Pacer Industrials and Logistics ETF (SHPP)
Pacer Industrials and Logistics ETF tracks the Pacer Global Supply Chain Infrastructure Index, which aims to offer investors exposure to globally listed stocks and depositary receipts involved in the support and functioning of global distribution supply chains. It holds 95 stocks in its basket, with FedEx accounting for the eighth position at 4.2% share.
Pacer Industrials and Logistics ETF has accumulated $1.1 million in its asset base. It trades in a meager volume of under 500 shares and charges 60 bps in annual fees.
ProShares Supply Chain Logistics ETF (SUPL)
ProShares Supply Chain Logistics ETF is the first ETF focused exclusively on the companies poised to benefit from the transformation of how raw materials and goods move around the world. These logistics companies include leading global shipping, railroad, air and trucking companies that collectively touch every point of the supply chain. It follows the FactSet Supply Chain Logistics Index, charging investors 58 bps in annual fees.
ProShares Supply Chain Logistics ETF holds 40 stocks in its basket, with FedEx taking the second spot with 4.7% of the assets. It has amassed $2 million in its asset base and trades in a volume of 100 shares per day. It charges 58 bps in fees per year from investors.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
FedEx Corporation (FDX) : Free Stock Analysis Report
iShares U.S. Transportation ETF (IYT): ETF Research Reports
First Trust NASDAQ Transportation ETF (FTXR): ETF Research Reports
ProShares Supply Chain Logistics ETF (SUPL): ETF Research Reports
Pacer Industrials and Logistics ETF (SHPP): ETF Research Reports
