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Should You Buy FedEx Stock on the Dip?
Shares of FedEx (NYSE:FDX) fell on Friday after the company reported its latest earnings numbers. The logistics company posted an adjusted per-share profit of $4.59 for the period ending Feb. 28, which was five cents shy of analyst forecasts of $4.64. The holiday season was a busy one for the company and revenue of $23.6 billion was up 10% from a year ago.
However, the company notes that its results were negatively impacted by omicron, higher transportation costs and wages. And with oil prices on the rise of late, that too, is likely weighing on the stock and its immediate future. The company's operating income totaled $1.33 billion this past quarter, which was up 32% from a year earlier. And FedEx notes that was 'due to higher revenue per shipment and a net fuel benefit at all transportation segments.' The danger is that there could be a reverse impact next quarter.
Investors are likely a little worried about the stock not just due to oil prices but also of rising COVID-19 case numbers in some parts of the world that have been loosening pandemic-related restrictions. A resurgence of COVID could be disastrous for the economy and put in doubt just how strong a year FedEx will have in 2022.
In the past 12 months, shares of FedEx have fallen more than 17%. However, with the stock trading at a relatively modest 11 times its future earnings, now could be a great time for investors to buy FedEx. Although there's some short-term risk, FedEx is still a solid investment to hang to for the long term.
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