Shares of FedEx (FDX - Free Report) fell sharply in morning trading Monday, dropping more than 6.5% from their previous closing price on the back of an analyst note that warned of a consequential change in management.
Bank of America Merrill Lynch on Monday downgraded FedEx and slashed its price target for the stock to $220 from $304. The firm pointed to the abrupt exit of FedEx’s Express unit chief last week as a signal that the shipping giant could be struggling to reach a profit goal.
“The company made a surprising change to its Express CEO, which we believe could signal a reduction or delay in its profit improvement target,” wrote BOAML’s Ken Hoexter in a note. “This is a rapid and, in our view, out of character change for a company that is still operated by its founder, chairman & CEO Fred Smith.”
Hoexter is referring to the departure of Dave Cunningham, who FedEx recently said would be leaving his role as head of the company’s air delivery unit. Cunningham’s exit is perhaps more perplexing when one considers that FedEx is right in the middle of its busiest period of the year.
Hoexter’s new call would represent a roughly 9% climb from FDX’s Friday close. In morning trading, the stock was down about 6% to around $189 per share. Shares had lost more than 23% in the past six months prior to today.
The earnings outlook for FedEx is showing mixed trends. For instance, FedEx has witnessed one positive revision and one negative revision to current-quarter EPS estimates within the last 30 days, and the overall consensus estimate for that period has moved one penny lower.
Nevertheless, revisions have been more positive for FedEx’s full fiscal year ending in May 2019. For that period, three positive revisions have been delivered in the last 30 days, and the consensus mark has added two cents in that time. FedEx is now expected to tally full-year earnings of $17.37 per share, which would represent year-over-year growth of 13.5%.
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Shares of FedEx (FDX - Free Report) fell sharply in morning trading Monday, dropping more than 6.5% from their previous closing price on the back of an analyst note that warned of a consequential change in management.
Bank of America Merrill Lynch on Monday downgraded FedEx and slashed its price target for the stock to $220 from $304. The firm pointed to the abrupt exit of FedEx’s Express unit chief last week as a signal that the shipping giant could be struggling to reach a profit goal.
“The company made a surprising change to its Express CEO, which we believe could signal a reduction or delay in its profit improvement target,” wrote BOAML’s Ken Hoexter in a note. “This is a rapid and, in our view, out of character change for a company that is still operated by its founder, chairman & CEO Fred Smith.”
Hoexter is referring to the departure of Dave Cunningham, who FedEx recently said would be leaving his role as head of the company’s air delivery unit. Cunningham’s exit is perhaps more perplexing when one considers that FedEx is right in the middle of its busiest period of the year.
Hoexter’s new call would represent a roughly 9% climb from FDX’s Friday close. In morning trading, the stock was down about 6% to around $189 per share. Shares had lost more than 23% in the past six months prior to today.
The earnings outlook for FedEx is showing mixed trends. For instance, FedEx has witnessed one positive revision and one negative revision to current-quarter EPS estimates within the last 30 days, and the overall consensus estimate for that period has moved one penny lower.
Nevertheless, revisions have been more positive for FedEx’s full fiscal year ending in May 2019. For that period, three positive revisions have been delivered in the last 30 days, and the consensus mark has added two cents in that time. FedEx is now expected to tally full-year earnings of $17.37 per share, which would represent year-over-year growth of 13.5%.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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