FedEx Corp. stock plunged Wednesday after the company’s quarterly miss and steep outlook cut triggered several Wall Street downgrades.
FedEx FDX, -12.92% late Tuesday reported fiscal first-quarter earnings below market expectations and further spooked analysts by cutting its guidance for fiscal 2020 by about 18%, blaming it largely on “trade tensions” and global economic weakness.
FedEx shares closed at their lowest in three weeks and suffered their largest one-day percentage loss since December 2008. The stock traded as low as $148.50, its lowest since Aug. 28.
Of the 27 analysts surveyed by FactSet, at least four analysts downgraded FedEx’s shares and 10 analysts cut their price targets for the stock. The average rating remains overweight, and the average price target was lowered to $171.23 from $180.52 as of the end of August.
Analyst David Ross at Stifel Nicolaus downgraded the package delivery company to hold, after being at buy since March 2018, and cut his price target to $171 from $185. Ross said he expects the stock to continue to underperform over the next few quarters as the global economy is unlikely to rebound in 2020.
FedEx in August ended its contract to deliver Amazon.com Inc.’s AMZN, -0.28% ground packages, and in June ended its FedEx Express domestic contract with e-commerce giant.
FedEx losses on Wednesday weighed on the Dow Jones Transportation Average DJT, -1.21% and also on rival United Parcel Service Inc.’s UPS, -1.10% shares. FedEx shares have lost 7% this year, contrasting with gains of 20% and 16% for the S&P 500 index SPX, +0.03% and the Dow Jones Industrial Average. DJIA, +0.13%