FedEx Reports Mixed Earnings as Stock Lags Behind Rivals
FedEx Corporation (FDX), with a market capitalization of $61.2 billion, offers a variety of transportation, e-commerce, and business services on a global scale. Based in Memphis, Tennessee, the company divides its operations into four segments: FedEx Express, FedEx Ground, FedEx Freight, and FedEx Services. As a large-cap stock, FedEx is classified among companies valued at $10 billion or more. Additionally, it provides supply chain management solutions alongside trade management tools and data.
Recently, FedEx faced a significant decline, dropping 19.1% from its 52-week high of $313.84. Over the past three months, the company’s stock decreased by 9.5%, underperforming the Industrial Select Sector SPDR Fund (XLI), which fell by only 4.5% during the same timeframe.
On a year-to-date basis, FDX has declined by 9.7%, in contrast to XLI’s modest gain of 1.9%. Moreover, over the last 52 weeks, FedEx shares experienced a slight increase of 1.5%, while the XLI saw a return of 9.5%.
Currently, FDX has been trading below its 50-day moving average since late December 2024 and below its 200-day moving average since late January.
Despite beating Q2 FY25 earnings expectations with an adjusted EPS of $4.05 reported on December 19, 2024, FedEx’s stock experienced a slight decline the following day. The company’s revenue of approximately $22 billion fell short of estimates and showed a year-over-year decline, indicating weakness in demand, particularly in the FedEx Freight segment. Furthermore, FedEx revised its full-year EPS guidance downward to a range of $16.45 to $17.45. The firm also faces macroeconomic challenges, including weak U.S. industrial production and lower-than-anticipated shipment volumes, which have raised concerns among investors.
In comparison, Forward Air Corporation (FWRD) has underperformed FDX, showing a 33.9% decline over the past year and a 35.8% drop on a year-to-date basis. Despite FedEx’s struggles compared to its sector, analysts hold a cautiously optimistic outlook for the stock. Currently, 27 analysts have given FedEx a consensus rating of “Moderate Buy,” and the stock is trading below the average price target of $317.85.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
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