On Wednesday, US package delivery stocks FedEx Corp (NYSE:FDX) and United Parcel Services Inc. (NYSE:UPS) edged slightly lower ahead of Black Friday.
On the other hand, Germany’s Deutsche Post AG (ETR:DPW), the parent company of DHL, edged slightly higher ahead of the US session. Analysts expect a significant rebound during the holiday season.
FedEx
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FedEx said last week it expects record deliveries during the holiday season, predicting a 10% increase from last year. The company missed FQ1 earnings expectation in September whilst beating on revenue. It reports its FQ2 results at the peak of the holiday season.
Therefore, given the management’s optimistic shipment forecast, the stock could rally significantly ahead of the FQ2 results. The stock has recently pulled back to trade at an attractive P/E ratio of 12.95.
Technically, FedEx shares seem to have pulled back to complete a downward breakout from an ascending channel formation, thus creating an opportunity for a rebound.
Therefore, although the stock is far from reaching oversold conditions, it may have opened another opportunity for buyers to swoop in.
They could target profits at about $263.25, or higher at $278.11, while $234.96 and $219.61 are crucial support zones.
UPS
Although United Parcel Services shares trade at a higher P/E ratio of about 28.54, the company offers exciting EPS growth prospects of about 16.23% per year over the next five years.
In addition, the company recently declared a quarterly dividend of $1.02 per share, implying a forward yield of 1.95%.
UPS announced earlier this month plans to hire 60,000 seasonal workers ahead of the holiday season, indicating high anticipation for increased activity.
Technically, United Parcel Services shares seem to be trading within a descending channel formation in the intraday chart. However, the stock recently bounced off the trendline support to surge towards the trendline resistance creating an opportunity for a breakout.
Therefore, investors could target channel breakout profits at about $220.03, or higher at $234.12, while $196.72 and $181.04 are support levels.
Deutsche Post (DHL)
Alternatively, if you are looking for a European-based shipping stock, then DHL could be an exciting option. In the company’s most recent quarter, DHL’s revenue and earnings outperformed earnings expectations, with revenue surging 23% from the same quarter a year ago.
The stock now trades at an exciting P/E ratio of 14.57, making it a compelling option for value inventors. Furthermore, the stock trades at an attractive forward dividend yield of 2.41%. Therefore, it could also gain the attention of dividend investors.
Technically, Deutsche Post shares seem to be trading within an ascending channel in the intraday chart. However, it has recently pulled back to find the trendline support, thus creating an opportunity for a rebound.
As a result, investors could target extended gains at about $57.70, or higher at $59.35, while $54.31 and $52.52 are support levels.
Conclusion
In summary, shipping companies could experience a significant spike in stock prices amid an upbeat holiday season.
Therefore, with the likes of UPS and FDX pulling back recently, it could be time to buy ahead of Black Friday.
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