FedEx Corp FDX has found itself in tumultuous waters, grappling with its recent quarterly results that have left investors on edge. The stock took a beating, nosediving over 15% during midday trading on Friday following the earnings announcement, erasing gains accumulated over the past quarter.

Despite the downfall, FedEx investors have only seen a meager 1.56% increase over the past year and less than 1% year-to-date, painting a bleak picture for the once high-flying company.

A Challenging Quarter: FedEx Misses the Mark

Data released by FedEx showcases first-quarter revenue and earnings falling short of analyst projections, attributing the disappointing results to a tumultuous period marked by diminished U.S. domestic priority package volumes and escalating wage and transportation expenses. This revelation triggered a reevaluation of FedEx’s growth trajectory, casting a shadow of uncertainty over the company’s future endeavors.

The logistics giant has downwardly revised its full-year guidance, now anticipating revenue growth in the low single-digit range for fiscal year 2025, further dampening investor sentiment and raising concerns about FedEx’s ability to rebound.

Morgan Stanley’s Ravi Shanker dealt a blow by downgrading FedEx from Equal-Weight to Underweight, slashing the price target from $215 to $200, underscoring the prevailing pessimism surrounding the stock.

On a more positive note, Baird maintained an Outperform rating while adjusting its target from $340 to $320 in a gesture of cautious optimism amidst the current challenges.

Find Out More: Deciphering the Dip – FedEx and UPS Stocks Slip Friday: What’s the Cause?

FedEx Stock Plunges into Bear Territory

FedEx’s technical indicators offer no respite to worried investors grappling with uncertainty in the market.

The stock is currently below its 5, 20, and 50-day exponential moving averages, indicating a pronounced bearish trend that intensified following the sharp decline on Friday.

Chart sourced from Benzinga Pro

With the current share price languishing at $254.36, the stock finds itself firmly entrenched in bear territory given its moving averages. The eight-day, 20-day, and 50-day SMA (simple moving average) all stand starkly above the present stock price, emitting unmistakable bear signals. Even the 200-day SMA looms above at $267.43, reinforcing a prolonged downward momentum.

Learn More: FedEx Struggles on Q1 Earnings, Lowers Guidance: Analysts Predict More Storms Ahead

Chart sourced from Benzinga Pro

Exercise caution. The MACD (Moving Average Convergence/Divergence) indicator is perched at a dismal -1.77, echoing bearish sentiment, while the RSI (Relative Strength Index) stands at 26.67, indicating oversold conditions. Although an oversold RSI typically hints at a possible rebound, the stock’s deep plunge into bearish territory might impede any short-to-mid-term recovery.

When FedEx stock manages to climb above the 200-day SMA, investors need to closely monitor oscillators for any signs of shifting tides.

FedEx’s recent earnings disappointment and subsequent analyst downgrades have sent shockwaves through the market, as mirrored in the stock’s technical signals.

As FedEx navigates stormy conditions ahead, investors must exercise caution, meticulously weighing potential catalysts against the looming risks of an economic slowdown.

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