Key Takeaways
Package delivery firms are generating some of the fastest e-commerce-related revenue growth amid the pandemic online shopping boom.
This will continue in 2021-2022, in our view, beating sell-side expectations for a tapering of growth after the pandemic.
Robust package volume and pricing growth is occurring simultaneously with lower fuel costs and efficiency improvements following a recent investment surge in automated logistics.
Similar to 2020, FedEx (FDX 258 *****) and UPS (UPS 166 *****) will generate robust earnings growth on these tailwinds in 2021-2022, in our view, leading the market to eventually drive up their heavily discounted valuations relative to the S&P 500 and other e-commerce beneficiaries.
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