FedEx has become a “show-me story,” said one analyst, and believes the “the good news” was that the company provided some specifics on the timing of a cost-cutting and rate-raising plan, and expressed “urgency” regarding its implementation.
Shares of FedEx Corp. fell Friday, as the package delivery giant’s warning of a disappointing earnings report didn’t go far enough, but some analysts found reason to be optimistic.
The stock FDX, -3.30% sank 2.6% in morning trading Friday, toward the lowest close since June 2020. It has plummeted 26.5% since FedEx issued its profit warning after the Sept. 15 close, highlighted by the record 21.4% plunge on Sept. 16. That compares with a 10.7% drop in the Dow Jones Transportation Average DJT, -2.63% since Sept. 15, and a 1,324-point, or 4.3% selloff in the Dow Jones Industrial Average DJIA, -1.87%.
“FDX is a show-me story stock at this point, a label that is not conducive to broader market skittishness, and proof of execution is required before there is a greater willingness to provide support, even at depressed valuation levels,” Chappell wrote in a note to clients. “That said, the obvious miss-and-lower catalyst is done, management is taking aggressive actions to stem the margin bleed,” and the relative underperformance has already been “immense” in the past month.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
FedEx plans up to $2.7 billion in cost cuts, higher shipping rates as demand weakensFedEx on Thursday announced between $2.2 billion and $2.7 billion in cost savings for the fiscal year ahead and said it would raise shipping rates for air and ground services in January.
Read more »
FedEx Hikes Package Rates, Details Cost Cutting as Demand Weakens GloballyFedEx announced rate hikes and detailed its cost-cutting efforts after warning last week it was seeing demand weaken globally.
Read more »
FedEx grilled on cost-cut plan after profits slideFedEx Corp outlined cost cuts of up to $2.7 billion after falling demand hammered first-quarter profits, but analysts grilled company executives with questions in an earnings call about whether steps such as parking planes and shuttering some offices were too little too late.
Read more »
FedEx hikes package rates for 2023FedEx will raise ground and express shipping rates by an average of 6.9% next year, the company said Thursday. Freight rates will increase by an average of 6.9% to 7.9%.
Read more »