far, FedEx (NYSE: FDX) stock has declined by 14% in 2020. In March, the
logistics company withdrew its fiscal 2020 guidance due to uncertainty amid the
COVID-19 pandemic. United Parcel Service (NYSE: UPS) stock has fallen by 8.3%
as of June 26. A slowdown in global business activity due to the outbreak hurt
the demand for shipping services.
will likely announce its fourth-quarter results after the financial markets
close on June 30. The revenue and earnings could fall due to the impact of
Estimate for Fedex’s Q4 results:
beat analysts’ revenue expectations for the third quarter of fiscal 2020, which
ended on February 29. The company’s third-quarter revenue rose 2.8% YoY
(year-over-year) to $17.49 billion. Analysts expected revenue of $16.89
billion. The increased revenue from the FedEx Ground segment was offset by lower
FedEx Express and FedEx Services revenues.
company’s third-quarter adjusted EPS declined over 53% to $1.41, which was in
line with Wall Street’s expectations. The impact of higher revenue was more
than offset by a significant decline in the company’s margins. A continued
shift to lower-yielding services, an intensely competitive pricing environment,
and costs to expand services hurt the margins.
expect the impact of COVID-19 to be more profound on FedEx’s fourth-quarter
results. They expect the company’s adjusted EPS to fall about 69% YoY to $1.57.
Wall Street expects a 7.8% fall in the fourth-quarter revenue to $16.42 billion
to hurt the bottom line. Also, a rise in revenue from lower-margin businesses
and COVID-19 related costs could lower FedEx’s profitability.
Business dynamics amid COVID-19:
economies across the globe continue to hurt FedEx’s Express business. The
company ended its Express US shipping contract with Amazon (NASDAQ: AMZN) in
June 2019. The company also suspended its ground delivery contract with Amazon
in August 2019. Amazon has become one of FedEx and UPS’s rivals by enhancing
its delivery network.
increase efficiency amid the changing dynamics due to COVID-19, the company
decided to combine its Express and Ground business capabilities. FedEx’s
decision to combine the fulfillment capabilities was essentially made to
support the rise in e-commerce services. Several companies have seen a spike in
their e-commerce businesses. Customers have been following social-distancing
norms. FedEx has been enhancing its fulfillment capacity to support the rise in
e-commerce services amid the pandemic.
higher e-commerce investments will likely hurt the company’s margins. Recently,
FedEx announced an alliance with BigCommerce to support small and medium
businesses’ e-commerce sales amid COVID-19. In May, FedEx announced a multiyear
partnership with Microsoft (NASDAQ: MSFT). The collaboration would focus on
combining Fedex’s digital and logistics network with Microsoft’s cloud
analysts believe in FedEx’s long-term prospects. However, other analysts worry
about how the economic slowdown, declining margins, and growing competition
could impact the company. Currently, 14 out of 28 analysts recommend a “buy,”
13 recommend a “hold,” and one analyst recommends a “sell.”
a 12-month average target price of $149, Wall Street sees a 14% upside in the
stock. The company’s business update and outlook for fiscal 2020 will likely
influence its stock price movement. However, rising COVID-19 cases and
macro-economic challenges might impact FedEx. Right now, the outlook for the
high-margin business-to-business Express shipments looks bleak.
All information on this website is of a general nature. The information is not adapted to conditions that are specific to your person or entity. The information provided can not be considered as personal, professional or legal advice or investment advice to the user.
Signal Factory is not represented as a registered investment consultant or brokerage dealer nor offers to buy or sell any of the financial instruments mentioned in the service offered.
While Signal Factory believes that the content provided is accurate, there are no explicit or implied warranties of accuracy. The information provided is believed to be reliable; Signal Factory does not guarantee the accuracy or completeness of the information provided. Third parties refer to Signal Factory to provide technology and information if a third party fails, and then there is a risk that the information may be delayed or not delivered at all.
All information and comments contained on this website, including but not limited to, opinions, analyzes, news, prices, research, and general, do not constitute investment advice or an invitation to buy or sell any type of instrument. Signal Factory assumes no responsibility for any loss or damage that may result, directly or indirectly, from the use or dependence on such information.
All information contained on this web site is a personal opinion or belief of the author. None of these data is a recommendation or financial advice in any sense, also within the meaning of any commercial act or law. Writers, publishers and affiliates of Signal Factory are not responsible for your trading in any way.
The information and opinions contained in the site are provided for information only and for educational reasons, should never be considered as direct or indirect advice to open a trading account and / or invest money in Forex trading with any Forex company . Signal Factory assumes no responsibility for any decisions taken by the user to create a merchant account with any of the brokers listed on this website. Anyone who decides to set up a merchant account or use the services, free of charge or paid, to any of the Forex companies mentioned on this website, bears full responsibility for their actions.
Any institution that offers a service and is listed on this website, including forex brokers, financial companies and other institutions, is present only for informational purposes. All ratings, ratings, banners, reviews, or other information found for any of the above-mentioned institutions are provided in a strictly objective manner and according to the best possible reflection of the materials on the official website of the company.
Forex trading is potentially high risk and may not be suitable for all investors. The high level of leverage can work both for and against merchants. Before each Forex investment, you should carefully consider your goals, past experience and risk level. The opinions and data contained on this site should not be considered as suggestions or advice for the sale or purchase of currency or other instruments. Past results do not show or guarantee future results.
Neither Signal Factory nor its affiliates ensure the accuracy of the content provided on this Site. You explicitly agree that viewing, visiting or using this website is at your own risk.