Is FedEx (FDX) a Buy as Wall Street Analysts Look Optimistic?

Core Viewpoint - The article discusses the reliability of brokerage recommendations, particularly focusing on FedEx (FDX), and highlights the importance of using these recommendations in conjunction with other analytical tools like the Zacks Rank. Brokerage Recommendations for FedEx - FedEx has an average brokerage recommendation (ABR) of 1.96, indicating a position between Strong Buy and Buy, based on recommendations from 30 brokerage firms [2] - Out of the 30 recommendations, 16 are Strong Buy and 2 are Buy, which account for 53.3% and 6.7% of all recommendations respectively [2] Limitations of Brokerage Recommendations - Solely relying on brokerage recommendations for investment decisions may not be wise, as studies show limited success in guiding investors towards stocks with the best price increase potential [5] - Brokerage firms often exhibit a strong positive bias in their ratings due to vested interests, leading to a disproportionate number of Strong Buy recommendations compared to Strong Sell [6][11] Zacks Rank as an Alternative - The Zacks Rank categorizes stocks into five groups based on earnings estimate revisions, providing a more effective indicator of a stock's price performance in the near future [8][12] - The Zacks Rank is timely and reflects changes in earnings estimates quickly, unlike the ABR which may not be up-to-date [13] Current Earnings Estimates for FedEx - The Zacks Consensus Estimate for FedEx's current year earnings has increased by 0.4% over the past month to $18, indicating growing optimism among analysts [14] - This increase in consensus estimates, along with other factors, has resulted in a Zacks Rank 2 (Buy) for FedEx, suggesting a positive outlook for the stock [15]