FedEx Corp (FDX) has hit a rough patch, sending shockwaves through the market after its recent quarterly earnings report. The stock plummeted over 15% during midday trading on Friday, wiping out gains made during the past quarter. This steep decline has left investors concerned about the company’s future prospects, especially considering the meager 1.56% gain over the past year and less than 1% year-to-date return.
The disappointment stems from FedEx’s first-quarter results, which fell short of analyst expectations. The logistics giant attributed its struggles to a “challenging quarter,” citing decreased U.S. domestic priority package volumes and rising wage and transportation costs. This news prompted a reassessment of FedEx’s growth trajectory, leading the company to revise its full-year guidance downward. FedEx now projects revenue growth in the low single-digit range for fiscal year 2025, a significant shift from previous expectations.
Analysts are grappling with the implications of these developments. Morgan Stanley’s Ravi Shanker downgraded FedEx from Equal-Weight to Underweight, cutting the price target from $215 to $200. Meanwhile, Baird maintained its Outperform rating but lowered its target from $340 to $320, reflecting a more optimistic outlook despite the current challenges.
The technical indicators paint a bleak picture for FedEx investors. The stock is currently trading below its 5, 20, and 50-day exponential moving averages, a strong signal of a bearish trend. This confirms the downward pressure on the stock price following Friday’s plunge. With a current share price of $254.36, the stock sits firmly in bear territory, with all key moving averages – the 8-day, 20-day, 50-day SMA, and even the 200-day SMA – sitting above the current stock price. This reinforces a long-term bearish momentum.
Further reinforcing this bearish sentiment, the MACD (Moving Average Convergence/Divergence) indicator stands at a negative 1.77, signaling bearishness. The RSI (Relative Strength Index) of 26.67 indicates oversold conditions, which could suggest a potential rebound. However, the deep bear territory currently occupied by the stock makes a short-to medium-term rebound seem less likely.
While FedEx navigates these headwinds, investors should remain vigilant, weighing any potential catalysts against the risks of an economic slowdown. It remains to be seen whether the company can turn the tide and regain investor confidence. The key for investors will be to monitor the stock closely, especially once it starts trading above the 200-day SMA, and observe the oscillators for potential changes in events. The future trajectory of FedEx remains uncertain, but one thing is clear: the company faces a significant uphill battle in regaining its footing.
