FedEx Shares Plummet as Analysts Lower Price Targets Following Revised Outlook

Photo credit: www.investopedia.com

Key Takeaways

FedEx experienced a significant decline in its stock value on Friday after the company announced a lowered forecast for the third consecutive quarter. As a result, multiple analysts have adjusted their price targets for the corporation’s shares. Since the beginning of the year, the stock’s value has decreased by approximately 20%.

On Friday, FedEx (FDX) saw its shares drop sharply as various financial analysts revised their price targets downward following the company’s warning regarding its economic outlook for the third quarter in a row.

During intraday trading, FedEx shares plummeted by 9%, trading near $224. This decline marks a significant downturn, with the stock losing about one-fifth of its value since the start of the year.

UBS and Bank of America both lowered their price targets for FedEx, adjusting them to $331 and $272, respectively. The analysts cited inflationary challenges and ongoing economic uncertainties as key factors influencing their assessments. Despite these adjustments, they maintained “buy” ratings, indicating a positive outlook based on potential recovery.

In contrast, Deutsche Bank analysts expressed a more optimistic perspective by sustaining their “buy” rating and a price target of $337. They noted that after facing several disappointing financial disclosures from FedEx, the latest results were seen as a reassuring development.

“We recognize that a downward revision from a company so sensitive to macroeconomic conditions may not be well-received by investors at this moment, especially as market sentiment remains fragile,” remarked the Deutsche Bank analysts. However, they expressed optimism regarding FedEx’s initiatives to manage costs effectively and suggested that the adjusted forecast could be justified, considering broader seasonal trends and economic challenges.

Source
www.investopedia.com