A profit warning from FedEx was ringing alarm bells for Wall Street and beyond on Friday, with shares of the economic bellwether slumping as analysts piled on downgrades and price target cuts.
FedEx FDX stock slid 20% to $165 in premarket hours after the company yanked guidance for the year, called for much lower quarterly profit and revenue and warned of a tough 2023 . The shipper blamed “macroeconomic weakness” in Asia and “service challenges” in Europe for a $500 million revenue shortfall in these regions.
Among Wall Street banks bringing the hammer down, JPMorgan cut shares to neutral from overweight, dropping their Dec. 2023 price target to $214 from $258. Lead analyst Brian P. Ossenbeck said they published a negative preview of results last week, but the shipper’s results and short-term outlook were “materially worse than expected” in the Express service, which offers guarantees on delivery times.
A similar downgrade came from KeyBanc Capital Markets, which slashed FedEx shares to sector weight from overweight. Acknowledging a move that may seem knee-jerk, analysts Todd Fowler and Carney Blake said in a note that they see a “difficult path forward [near term], particularly in light of decelerating macro datapoints combined with low confidence around management execution.
“FedEx will expedite long-term cost-out initiatives, but we see EPS risk into the midteens, yielding short-term downside risk to shares toward $150,” said Wetherbee and Winski.
Greatest case of 'covering your a55' I have seen on CNBC. Basically, FedEx has under-performed their competition for years and the outgoing CEO left a Goldilocks report for his incoming CEO. Unfortunately, a lot of people bought the FedEx lie and took a lot of the market down.
Did anyone stop for 5 seconds to consider that people are just buying items in person instead of shipping them now that they aren’t under lockdown at home? 🤦♂️People are freaking out over literally nothing.
$AMC $APE AMC APE WHERE IS YOUR DESPERATELY MISLEADING ARTICLE ON SHORT SELLING ? WHICH HEDGEFUNDS PAID FOR THAT?