FedEx Falls 15% After Earnings Miss, Bearish Signals Raise Red Flags For Investors

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FedEx stock plunged 15% after an earnings miss, wiping out quarterly gains and leaving investors with minimal YTD returns.
Lower-than-expected earnings, rising costs, and downgraded guidance lead FedEx stock to deep bear territory.
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FedEx Corp FDX has hit a rough patch, with its recent quarterly results leaving investors concerned. The stock plummeted over 15% during midday trading on Friday on the earnings news, wiping out gains made during this past quarter.

With the drop, FedEx investors have seen only a 1.56% gain over the past year and less than 1% year-to-date.

Earnings Miss: A Tough Quarter For FedEx

Reporting first-quarter revenue and earnings that fell short of analyst expectations, the logistics giant cited a "challenging quarter" due to decreased U.S. domestic priority package volumes and rising wage and transportation costs. This news prompted a reassessment of FedEx's growth trajectory.

The company has revised its full-year guidance downward, now projecting revenue growth in the low single-digit range for fiscal year 2025.

Morgan Stanley’s Ravi Shanker downgraded FedEx from Equal-Weight to Underweight, cutting the price target from $215 to $200.

Meanwhile, Baird maintained its Outperform rating but lowered its target from $340 to $320, reflecting some optimism despite current challenges.

FedEx Stock Chart In Deep Bear Territory

FedEx’s technical indicators provide no relief to investors amid the turbulence.

The stock is currently trading below its 5, 20, and 50-day exponential moving averages, signaling a strong bearish trend. This comes after the stock price plunged on Friday.

Chart created using Benzinga Pro

With a current share price of $254.36, the stock sits firmly in bear territory according to its moving averages. The eight-day, 20-day and 50-day SMA (simple moving average), are all far above the current stock price, giving out bear signals. Even the 200-day SMA sits above it at $267.43, reinforcing a long-term bearish momentum.

Chart created using Benzinga Pro

Caution is warranted. The MACD (Moving Average Convergence/Divergence) indicator stands at a negative 1.77, signaling bearishness, and the RSI (Relative Strength Index) of 26.67 indicates oversold conditions. While an oversold RSI is generally indicative of a potential rebound, the degree to which the stock is in deep bear territory right now may make it difficult for a rebound to happen over the short-to medium term.

Once FedEx stock starts trading above the 200-day SMA, investors should monitor oscillators for potential changes in events.

FedEx’s recent earnings report and analyst downgrades raise concerns, as reflected in the stock’s technical indicators.

As the company navigates these headwinds, investors should remain vigilant, weighing any potential catalyst against the risks of an economic slowdown.

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