FedEx Shares Fall After Lower Outlook From Trade Tensions
September 18 2019 - 10:59AM
Dow Jones News
By Patrick Thomas
Shares of FedEx Corp. (FDX) plunged about 12% to $151.23
Wednesday after the logistics company cut its forecast for the
year.
The Memphis, Tenn., company lowered its revenue outlook and said
it expects earnings to fall in its current fiscal year.
The profit warning comes after the company posted an 11% drop in
its first-quarter net income, driven by weakness in its Express
unit.
Shares of FedEx are down about 6% this year and off roughly 37%
over the past 12 months.
Analysts across the board downgraded their price estimates for
the company's stock. Stifel cut its rating on the company from
"buy" to "hold" and lowered its price target to $171 from $185 a
share. Morgan Stanley analysts cut their price target to $120 from
$131 and JPMorgan & Chase Co. lowered its target to $146 from
$168 a share.
"FedEx is tied heavily to the global macro and U.S. economy, so
to work, we believe the tailwinds need to be favorable, and
currently they're not," the Stifel analysts said in a research
note. "The 'self-help' related to continued margin expansion at
FedEx Express that management had been touting the past couple of
years has practically disappeared."
Shares of logistics rival United Parcel Service Inc. (UPS) were
down 1.3% and shares of the parent company of DHL, Deutsche Post
AG, were off 1.6%.
Write to Patrick Thomas at patrick.thomas@wsj.com
(END) Dow Jones Newswires
September 18, 2019 10:44 ET (14:44 GMT)
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