×

Fuel Stabilizing is a Positive for Shipping Stocks: Analyst

While higher surcharges helped offset the rising cost of fuel, FedEx reported a 33 percent increase in fourth quarter earnings. Urs Dur, vice president of shipping and logistics analyst at Lazard Capital, offered CNBC his outlook on the stock.

Dur said that the rapid increase in fuel prices makes it hard for FedEx to pass on costs in time. "In a growing economy, FedEx does well, but people cut back in recessions."

"I think in our view, we've always viewed fuel stabilizing here as a general positive here for the consumer, like a tax break without losing any benefits, but also for FedEx and UPS."

UPS vs FedEx—Advantages:

UPS's, entrenched business model helps it in the developed economies, Dur said.

On the other hand, FedEx is better in an expanding economy and was profitable through one of the greatest downturns in history, he adds.

"They have a nice outlook for GDP this year and for calendar 2012 they are looking at three percent global GDP, that is optimistic. I think the investor has built in margin growth for the company," Dur said.

Dur said there are plenty of buyers for FedEx right now, but that it would ne difficult to short the stock.

"We would like to see new guidance for the full year this is their fourth quarter. The market seems very uncertain about FedEx and stocks will trade sideways," he said.

______________________________
CNBC Data Pages:

______________________________

______________________________
Disclosures:

Urs Dur owns no shares in the companies mentioned above.

Disclaimer