8 Most Profitable Industrial Stocks to Invest In

2) FedEx Corporation (NYSE:FDX)

Net Income on TTM Basis: $4.047 billion

5-Year Net Income CAGR: 55.16%

Number of Hedge Fund Holders: 59

FedEx Corporation (NYSE:FDX) offers transportation, e-commerce, and business services in the US and internationally.

Wall Street analysts are quite optimistic about the company’s DRIVE program, which is a comprehensive cost-reduction initiative. FedEx Corporation (NYSE:FDX) has been undertaking numerous significant strategic moves, which are focused on streamlining its operations and enhancing shareholder value. For example, the merger of its Express and Ground network operations in the US, which forms part of its Network 2.0 strategy, should improve margins and capital efficiency.

Wall Street believes that e-commerce remains the significant growth driver for FedEx Corporation (NYSE:FDX). Notably, the recent trends provide unexpected support, primarily from Chinese outbound volumes. The merger of Express and Ground operations is expected to unlock opportunities to optimize route planning, reduce redundancies, and improve asset utilization. This consolidation is expected to result in more flexible and responsive service offerings. Therefore, it should enable FedEx Corporation (NYSE:FDX) to better compete in the evolving e-commerce landscape and capture the market share.

The company’s innovative approach to network optimization, diversified service offerings throughout multiple segments, robust global brand recognition, and extensive network should act as competitive advantages.

Citigroup initiated the coverage on the shares of FedEx Corporation (NYSE:FDX), issuing a “Buy” rating and a $301.00 price objective. Longleaf Partners, managed by Southeastern Asset Management, released its second quarter 2024 investor letter. Here is what the fund said:

“FedEx Corporation (NYSE:FDX) – Global logistics company FedEx was the top contributor for the quarter. Late in the quarter, FedEx reported strong fiscal year results, highlighting a year of strong cost management in a challenging revenue environment. Earnings per share (EPS) increased by 19%, and reduced capital expenditures narrowed the gap between EPS and FCF per share. With the increase in FCF, the company has become a significant share repurchaser, which is a welcome change. The company also announced a strategic review of their Freight segment. Our appraisal has long accounted for the underappreciated value in FedEx’s less-than-truckload operations. A potential spin-off or sale could unlock substantial value, as comparable companies like Old Dominion trade at significantly higher multiples on revenue, cash flow, and earnings than those applied to FedEx Freight by the market and our appraisal today.”