We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why is FedEx (FDX) Stock Down 6% Despite Strong Q4 Earnings?
Read MoreHide Full Article
Shares of FedEx Corporation (FDX - Free Report) declined 6.2% to $241.77 post the earnings release on Jun 19, despite reporting better-than-expected revenues and earnings per share in the fourth quarter of fiscal 2018.
Reasons Behind the Stock’s Plunge
The escalating fears of a trade war hampering the free flow of goods between countries are the main reasons behind the stock’s dismal performance. In fact, on the fourth quarter conference call, FedEx’s CEO Fredrick Smith expressed his concerns on the same.
The fact that FedEx has a significant presence in China has given rise to worries over substantial revenue loss due to the weakening of trade following the tariffs. We note that FedEx opened a hub in Shanghai in January 2018 to strengthen its foothold in China.
Last week, the White House announced plans to impose 25% tariff on $50 billion worth of imports. President Donald Trump is expected to start taxing products worth $34 billion as early as Jul 6 while he will levy tariff on the additional goods of $16 billion later. Beijing said it will counter the move, imposing tariffs on U.S. soybeans and other farm products.
However, Trump will attack the Chinese retaliation by imposing tariff on yet another $200-billion worth of Chinese goods. Also, it will levy tax on further $200 billion of Chinese products in case China still refuses to withdraw.
These mounting trade tensions certainly do not bode well for FedEx and might further impact the stock.
In the past six months, shares of GATX and Expeditors have rallied more than 15% and 18%, respectively, while SkyWest stock has gained above 5%.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
Why is FedEx (FDX) Stock Down 6% Despite Strong Q4 Earnings?
Shares of FedEx Corporation (FDX - Free Report) declined 6.2% to $241.77 post the earnings release on Jun 19, despite reporting better-than-expected revenues and earnings per share in the fourth quarter of fiscal 2018.
Reasons Behind the Stock’s Plunge
The escalating fears of a trade war hampering the free flow of goods between countries are the main reasons behind the stock’s dismal performance. In fact, on the fourth quarter conference call, FedEx’s CEO Fredrick Smith expressed his concerns on the same.
The fact that FedEx has a significant presence in China has given rise to worries over substantial revenue loss due to the weakening of trade following the tariffs. We note that FedEx opened a hub in Shanghai in January 2018 to strengthen its foothold in China.
Last week, the White House announced plans to impose 25% tariff on $50 billion worth of imports. President Donald Trump is expected to start taxing products worth $34 billion as early as Jul 6 while he will levy tariff on the additional goods of $16 billion later. Beijing said it will counter the move, imposing tariffs on U.S. soybeans and other farm products.
However, Trump will attack the Chinese retaliation by imposing tariff on yet another $200-billion worth of Chinese goods. Also, it will levy tax on further $200 billion of Chinese products in case China still refuses to withdraw.
These mounting trade tensions certainly do not bode well for FedEx and might further impact the stock.
FedEx Corporation Price
FedEx Corporation Price | FedEx Corporation Quote
Zacks Rank & Key Picks
FedEx carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Transportation sector are GATX Corporation (GATX - Free Report) , SkyWest, Inc. (SKYW - Free Report) and Expeditors International of Washington, Inc. (EXPD - Free Report) . While GATX and SkyWest carry a Zacks Rank #2 (Buy), Expeditors sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past six months, shares of GATX and Expeditors have rallied more than 15% and 18%, respectively, while SkyWest stock has gained above 5%.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>