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With a market cap of $61.1 billion, FedEx Corporation (FDX) is a global leader in express delivery services. Based in Memphis, Tennessee, it operates in the transportation and logistics sector, providing a wide array of shipping, e-commerce, and supply chain management solutions worldwide.
Companies valued at $10 billion or more are generally considered “large-cap” stocks, and FedEx fits this criterion perfectly, exceeding the mark. FedEx is renowned for its pioneering overnight delivery service, handling about 6 million packages daily through its "Superhub" at Memphis International Airport. With its comprehensive suite of services, including express, ground, and freight, FedEx has solidified its position in the global logistics sector.
However, the package delivery company has experienced a decline, slipping nearly 13.5% from its 52-week high of $291.27 reached on March 22. Over the past three months, its shares have decreased by 3.1%, underperforming the broader S&P 500 Index's ($SPX) 5.4% gain during the same period.
Longer term, FDX has declined marginally on a YTD basis, significantly lagging behind the SPX's 15.4% gains. Moreover, while FDX’s shares have surged 8.8% over the past 52 weeks but still underperformed SPX's 25.4% return in the same period.
To confirm the bearish price trend, FDX has been trading below both its 50-day and 200-day moving averages since mid-May.
FedEx underperformed due to the slowing global economy, higher operational costs associated with its transformation programs, and declining shipping volumes, exacerbated by competitive pressures from rivals. Despite this, the stock jumped a notable 7.4% after its Q3 earnings results on Mar. 21 due to earnings beat and improved profitability in a challenging demand environment. The company's success in implementing cost-cutting measures under its "DRIVE" initiative, aimed at enhancing efficiency and flexibility, contributed to investor confidence and drove the stock price higher.
In addition, FedEx's rival United Parcel Service, Inc. (UPS) has shown weaker performance compared to both FedEx and broader equity benchmarks. UPS shares have fallen by 23.9% over the past 52 weeks and are down 14% on a YTD basis.
Despite the stock’s relatively weak price action, analysts are cautiously optimistic about FDX’s prospects. The stock has a consensus rating of “Moderate Buy” from the 24 analysts in coverage, and the mean price target of $304.46 is a premium of 22.7% to current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
