FedEx (FDX) stock is spiraling Friday after the logistics giant missed top- and bottom-line expectations for its fiscal first quarter and revised its full-year outlook.
In the quarter ended August 31, FedEx's revenue decreased 0.5% year-over-year to $21.6 billion and its earnings per share (EPS) plunged 20.9% from the year-ago period to $3.60.
In a statement, FedEx CEO Raj Subramaniam called the quarter "challenging." However, he added that the company remained "focused on transforming our network, improving our efficiency, lowering our cost-to-serve, and enhancing our ability to adapt with speed to evolving market dynamics."
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Subramaniam says he is "confident in the value-creation opportunities ahead as we focus on reducing our structural cost, growing revenue profitably, and leveraging the insights from our vast collection of data as we continue to build the world's most flexible, efficient, and intelligent network."
FedEx's results fell short of analysts' expectations. Wall Street was anticipating revenue of $21.9 billion and earnings of $4.76 per share, according to CNBC.
As a result of this disappointing start to the year, FedEx revised its full-year outlook. The company now anticipates low single-digit revenue growth and earnings per share in the range of $20 to $21. It had previously forecasted low to mid-single-digit revenue growth and EPS in the range of $20 to $22.
"Our revised outlook reflects our continued confidence in the execution of our DRIVE [cost-cutting] initiatives and the effects of our recent pricing actions, which we expect to help offset weaker-than-expected demand trends," said FedEx Chief Financial Officer John Dietrich in a statement.
Is FedEx stock a buy, sell or hold?
It's been a volatile year for FedEx on the price charts and Friday's decline nearly erases the industrial stock's year-to-date gain. Still, Wall Street has remained bullish toward FDX.
According to S&P Global Market Intelligence, the average analyst target price for FDX stock is $310.77, representing implied upside of more than 20% to current levels. Additionally, the consensus recommendation is Buy. However, analysts are downwardly revise their price targets and ratings and may cut their ratings following the disappointing quarter.
Financial services firm Stifel is one of those that lowered its price rating on FedEx after earnings, to $321 from $327, while maintaining its Buy rating on the large-cap stock.
"Secular macroeconomic tailwinds are waning for FedEx, or are at least on pause for now, especially as trends like e-commerce penetration of total retail reset lower vs where they were at the height of the pandemic," says Stifel analyst Bruce Chan. "We believe there is still long-term opportunity for FedEx once secular trends resume their glide path post-COVID, and in a more mature and more disciplined global oligopoly, FedEx should be well-positioned to benefit."
Related Content
- UPS Stock Heads Toward Worst Day Ever After Earnings
- Kiplinger's Earnings Calendar and Analysis for This Week
- Stellantis Stock Shrugs Off UAW Strike Authorization Vote: What to Know
-
Stocks Hit Fresh Highs Ahead of the Fed As Earnings Pump Optimism: Stock Market TodaySHW and UNH were two of the best Dow Jones stocks Tuesday, thanks to solid earnings reports, and MSFT closed with a $4 trillion market cap.
-
Selling Your Haunted House? What You Have to Tell Buyers (and What You Don’t)You don’t need ghosts to spook buyers, sometimes a home’s past is enough. Here’s what sellers should know about disclosure laws, pricing and perception when a property has a haunted history.
-
Stocks Hit Fresh Highs Ahead of the Fed As Earnings Pump Optimism: Stock Market Today
SHW and UNH were two of the best Dow Jones stocks Tuesday, thanks to solid earnings reports, and MSFT closed with a $4 trillion market cap.
-
Targa Resources, Take-Two Interactive, Boston Scientific: Why Experts Rate These Stocks at Strong BuyWall Street is highly bullish on these three high-quality stocks.
-
Debunking Three Myths About Defined Outcome ETFs (aka Buffered ETFs)Defined outcome ETFs offer a middle ground between traditional equity and fixed-income investments, helping provide downside protection and upside participation.
-
This Is Why Judge Judy Says Details Are Important in Contracts: This Contract Had HolesA couple's disastrous experience with reclaimed wood flooring led to safety hazards and a lesson in the critical importance of detailed contracts.
-
US-China Trade Hopes Send Stocks to New Highs: Stock Market TodayApple and Microsoft are on track to join Nvidia in the $4 trillion market cap club.
-
A Lesson From the School of Rock (and a Financial Adviser) as the Markets Go Around and AroundIt's hard to hold your nerve during a downturn, but next time the markets take a tumble, remember this quick rock 'n' roll tutorial and aim to stay invested.
-
I'm a Financial Pro: This Is How You Can Guide Your Heirs Through the Great Wealth TransferFocus on creating a clear estate plan, communicating your wishes early to avoid family conflict, leaving an ethical will with your values and wisdom and preparing them practically and emotionally.
-
To Reap the Full Benefits of Tax-Loss Harvesting, Consider This Investment Strategist's StepsTax-loss harvesting can offer more advantages for investors than tax relief. Over the long term, it can potentially help you maintain a robust portfolio and build wealth.
