FedEx stock sinks as analysts cut price targets after shipper slashed its outlook

Takeaways

• FedEx shares fell Friday after the company cut its outlook for a third consecutive quarter.
• Several analysts lowered their price targets for the shipper's stock in response.
• The stock’s value has dropped by about a fifth since the beginning of the current year.

FedEx (FDX), shares fell Friday after several analysts lowered their price targets. The shipping giant had lowered its forecast for the third consecutive quarter.

FedEx shares dropped 9% in intraday trading on Friday, near $224. They have lost a fifth of their value from the beginning of the year.

Analysts from UBS and Bank of America lowered their price targets to $331 and $272, respectively, following FedEx's report, citing a greater-than-expected impact from inflationary pressures and economic uncertainty. However, both reiterated "buy" ratings, with their targets suggesting significant upside from Friday's level.

Deutsche Bank analysts were slightly more bullish, maintaining their "buy" rating and $337 price target. They said that after previous negative surprises in FedEx's reports, "we found the relatively clean and solid result to be a relief."

Analysts said that they understood the fact that a lower forecast from a company with a macroeconomically sensitive name would not be well received in today’s market where investors are on pins-and-needles. However, the analysts were “encouraged by the efforts of the company to cut costs” and suggested the lower estimate “makes sense” given seasonality and macroeconomic headwinds.