FedEx (FDX) will announce results 3/16 after the close with the Street consensus at $2.71 EPS and $22.8B in Revenues (-3.6%) while Q4/FY24 seen at $4.25/$23.4B and $16.92/$92.9B implying 1% revenue growth and 25% EPS growth for 2024. FDX shares closed higher last quarter but lower five of the previous eight reports, a six quarter average max move of 7.6%. FedEx provides a broad portfolio of transportation, e-commerce and business services via FedEx Express, FedEx Ground, FedEx Freight and FedEx Services. FDX sees a large opportunity Internationally, specifically in Europe, and is also increasing collaboration and efficiency to optimize networks, lower costs to serve and enhance return on capital while also unlocking new value through digital innovation. FDX has been a strong operating leverage story and has been consistently raising prices though is closely tied to Macro. FDX has a $50B market cap and trades 12X Earnings, 7.3X EBITDA and 44.8X FCF with a 2.3% yield. FDX will continue to face a softer Macro backdrop but all eyes are expected to be on an April 5^th DRIVE event for its long term cost savings target. FDX shares are up 16% YTD driven by a multiple re-rating closing its discount with the S&P but faces further earnings declines. Analysts have an average target of $204 with short interest up 65% Q/Q but low at 2% of the float. BAML upgraded to Buy with a $233 target on 2/2 as cost cuts take hold and productivity is enhanced. Wells Fargo raised its target to $225 but notes sizable headwinds from volume trends and seasonality. On the chart, FDX has trended strong and pulled back last week with the market near a 55/200 moving average bull cross as potential support at $195.50 while other support levels include VWAP from lows near $172.50 and $188.5 and $179.65 as 38.2% and 50% retracement levels respectively. The recent rally stalled right at VWAP off its 2021 highs and trend resistance, so a move above would be a major trend inflection wit $231.50 a 50% retrace target. FDX options are pricing in a 5% earnings move and 30-day IV Skew at +2.7 compares to the +5.1 52-week average. FDX’s put/call open interest is at the 85^th percentile and average IV30 crush is -23.5%. FDX had a buyer of 2500 March 202.5/192.5 put spreads last week while on 3/6 the June 240/180 strangles bought major size 11,000X leaning slightly bullish. FDX has seen 2500 June $175 puts bought.

Trade to Consider: Long the FDX March/April $190 Put Calendar Spreads for $3.50