What happened

Shares of FedEx Corp. (NYSE:FDX) climbed more than 10.1% in January, according to data provided by S&P Global Market Intelligence, as fears of a prolonged trade war with China and a global slowdown subsided.

So what

FedEx's steady upward swing throughout the month coincided with increased Wall Street optimism concerning the broader market, and was aided by a softening of rhetoric between Washington and Beijing. The gains, while solid, were not nearly enough to offset the company's 30% decline in December after it gave tepid full-year guidance due to concerns about trade wars and the health of the global economy.

Check out the latest FedEx earnings call transcript.

A FedEx cargo plane awaits takeoff.

FedEx shares took flight in January. Image source: FedEx.

Investors have also been concerned about Amazon's (NASDAQ:AMZN) growing delivery ambitions. A late-January report by Loop Capital analyst Anthony Chukumba suggesting Amazon could buy FedEx provided an added spark to the shares, though such a deal seems unlikely due to regulatory issues.

Chukumba was correct in saying FedEx is inexpensive, trading at about 11.45 times forward earnings estimates compared to archrival UPS's multiple of 14.12. FedEx's multiple dipped below 10 times projected earnings early in the month, before the share upswing began.

Now what

The issues that caused FedEx shares to drop in December are still a concern, but the market overreacted to poor guidance. The company's shares, even after the January recovery, still trade at a discount to their historic range:

FDX PE Ratio (Forward) Chart

FDX PE Ratio (Forward), ten year chart data by YCharts.

Another shock similar to the December decline can not be ruled out, if U.S.-China trade negotiations again turn south, the U.S. economy stumbles, or Amazon releases more information about its shipping ambitions. Long-term investors should note Amazon accounted for less than 2% of FedEx's 2018 revenue, and remember that the company is rapidly looking to expand its international and specialty delivery capabilities to offset any long-term decline in consumer package revenue.

It's hard to predict what will happen to FedEx shares in the months to come, but over the long haul I believe the trend is upwards.