FedEx Investors Eyeing Ground Segment This Earnings Season

FedEx Corporation (NYSE: FDX) is on Wall Street's radar heading into earnings.

Analysts at Bernstein Research recently commented that the company's FedEx Ground segment remains the key to the long case to the stock. "Keep your eyes on ground," analysts said.

Ground In Focus

Bernstein noted that FedEx's bull case is predicated on the idea that as the higher-return Ground segment grows faster than other divisions, overall returns should improve.

"The performance at Ground –where B2C trends are more meaningful, and where investor sentiment has historically been the highest – will be increasingly important as the more B2B / Freight heavy LTL and Express segments are expected to see near term challenges due to the macro," the firm wrote.

Stifel, meanwhile, was optimistic in October that FedEx's profits will go higher led by the segment.  Analysts at the firm gave FedEx a Buy rating on October 6, citing positive risk/reward.

Stifel analysts see better Ground and Freight profitability in the coming quarters after disappointment last quarter.

What To Watch

FedEx's last quarterly earnings results reported $2.42 earnings per share (EPS) for its fiscal first quarter of 2016 in mid-September. Those figures fell two cents short of Wall Street consensus.