Portion of a new article about the potential growth for FEDEX:
A recent bout of good news came when the 5,000 pilots flying FedEx's fleet of cargo jets agreed to vote on a labor contract, with union leaders recommending approval. Voting will run through Oct. 17. It was just one year ago that negotiations stalemated.
With labor hurdles clearing and business expanding, I think FedEx can continue to grow earnings 18% annually over the next two years, assuming the world economy does not slow too dramatically. First-fiscal-quarter profit, reported two weeks ago, blew past consensus estimates, rising 40% on remarkable demand for ground and international express shipments. The company reported income of $475 million, or $1.53 per share, versus a prior-year profit of $339 million, or $1.10 per share. Revenue rose 11 percent to $8.54.
I expect fiscal 2008 to bring in up to $8.10 in earnings per share. Slap an 18 price-earnings ratio on that and you can see the potential for $145 a share by mid-2008, up more than 34% from the current quote. If the market softens here in October, try to buy a pullback to the $100-$103 area. That's only a 5% to 8% drop from current levels but would signify to me that the fair-weather holders are out of the stock and that the serious shareholders are back in.
Jon Markman is editor of the independent investment newsletters Strategic Advantage and Trader's Advantage. While he cannot provide personalized investment advice or recommendations, he welcomes column critiques and comments at [email protected]; put COMMENT in the subject line. At the time of publication, Markman did not own or control shares of companies mentioned in this column.
The above paragraphs are from a new article in USATODAY by Analyst Jon Markhman. Sounds like a good place to put some of your money for growth.
A recent bout of good news came when the 5,000 pilots flying FedEx's fleet of cargo jets agreed to vote on a labor contract, with union leaders recommending approval. Voting will run through Oct. 17. It was just one year ago that negotiations stalemated.
With labor hurdles clearing and business expanding, I think FedEx can continue to grow earnings 18% annually over the next two years, assuming the world economy does not slow too dramatically. First-fiscal-quarter profit, reported two weeks ago, blew past consensus estimates, rising 40% on remarkable demand for ground and international express shipments. The company reported income of $475 million, or $1.53 per share, versus a prior-year profit of $339 million, or $1.10 per share. Revenue rose 11 percent to $8.54.
I expect fiscal 2008 to bring in up to $8.10 in earnings per share. Slap an 18 price-earnings ratio on that and you can see the potential for $145 a share by mid-2008, up more than 34% from the current quote. If the market softens here in October, try to buy a pullback to the $100-$103 area. That's only a 5% to 8% drop from current levels but would signify to me that the fair-weather holders are out of the stock and that the serious shareholders are back in.
Jon Markman is editor of the independent investment newsletters Strategic Advantage and Trader's Advantage. While he cannot provide personalized investment advice or recommendations, he welcomes column critiques and comments at [email protected]; put COMMENT in the subject line. At the time of publication, Markman did not own or control shares of companies mentioned in this column.
The above paragraphs are from a new article in USATODAY by Analyst Jon Markhman. Sounds like a good place to put some of your money for growth.
