Transportation leaders United Parcel Service (UPS) and FedEx (FDX) are both closing in on a new all-time high. With Q2 earnings due July 27, UPS stock may be set to deliver a breakout ahead of its rival, which reported fiscal 2021 and Q4 results in June. FedEx doesn’t report fiscal 2022 Q1 results until September.
Analysts expect UPS to post 31% earnings growth in its upcoming report. It reported a 141% gain in Q1. For the full year, consensus analyst estimates call for a 34% gain.
From its coronavirus lows in March 2020 to its most recent peak, UPS stock rose as much as 166%. FedEx stock flew as much as 261% during the same period.
Work-from-home and stay-at-home trends during the pandemic drove much of those gains. Now fears of the delta variant and a resurgence in Covid-19 cases may again spur demand for UPS and FedEx delivery services.
UPS Vs. FedEx: Reach, Revenue & Ratings
The two transportation rivals are quite similar in terms of annual revenue and global reach.
As of 2020, UPS had over 540,000 employees and operated in more than 220 countries, delivering 24.7 million packages every day. UPS generated $84.6 billion in revenue last year.
For fiscal 2021 (ended May 31), FedEx has approximately 570,000 employees, also operating in more than 220 countries. FedEx Express accounted for 50% of the company’s $84 billion in revenue in fiscal 2021. FedEx Ground (37%) and FedEx Freight (9%) make up the bulk of the rest.
Both UPS and FedEx hail from the transportation-air freight industry group, which ranks No. 43 among the 197 groups IBD tracks. With a 98 Composite Rating, UPS stock earns top billing among its peers. FedEx stock comes in at No. 2 with a 93 rating.
While neither stock made the latest list of new buys by the best mutual funds, both UPS and FedEx have solid institutional sponsorship. For UPS stock, 78 funds with an A+ rating from IBD have a stake in the company, while 69 such funds own shares in FedEx.
UPS Stock Vs. FedEx Stock: Who Will Deliver Next Breakout?
While both UPS and FedEx try to land new breakouts, UPS faces an earnings test next week.
UPS is building a flat base showing a 219.69 buy point.
The stock gapped up after reporting Q1 earnings on April 27. Volume came in 324% above average on the jump. Since then, UPS stock has held the bulk of those gains as it finds support along its 50-day moving average line. The relative strength line has come off the highs it hit in May but is now again trending higher.
See if UPS stock can again spike to a new all-time high when it reports next week.
Meanwhile, FedEx stock is testing resistance right at its 10-week line. See if it can complete its first-stage flat base and break out to its own new all-time high.
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Follow Matthew Galgani on Twitter at @IBD_MGalgani.
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