The delivery giant will report fiscal third-quarter earnings after tomorrow's close
The shares of FedEx Corporation (NYSE:FDX) are up 2.4% at $221.35 at last check, ahead of its fiscal third-quarter earnings report, which is due out after tomorrow's close. The delivery giant is brushing off Covid-19 shutdowns in the Chinese cities of Shenzhen and Dongguan, which have forced adjustments to its network, as China attempts to curb the worst virus outbreak in the region since the start of the pandemic.
The equity last week bounced off the $199 mark -- its lowest level since August 2020. A ceiling at the $225 is still keeping today's gains in check, though FDX is now pacing for its first close above the 20-day moving average since January. Year-to-date, FedEx stock is down 14.3%.
The equity has a positive history of post-earnings reactions, finishing five of eight next-day sessions higher over the last two years, including an 11.7% jump in July 2020. This time around, options traders are pricing in a 12.8% swing for the stock, which is much higher than the 6.5% move it averaged following its last eight reports, regardless of direction.
Analysts are already bullish towards FedEx stock, with 11 of the 15 in coverage carrying a "strong buy" rating. What's more, the 12-month consensus target price of $308.46 is a 39.3% premium to current levels.
The same cannot be said for the options pits. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), FDX's 50-day put/call volume ratio sits higher than 97% of reading from the past year, indicating long puts have been picked up at a much quicker-than-usual clip.
It's also worth noting the stock's Schaeffer's Volatility Scorecard (SVS) sits at 94 out of 100, meaning the equity has exceeded option traders' volatility expectations during the past year.