FedEx Corp (FDX) said earlier this week that continued investments in seven-day ground delivery service along with “operational synergies” in Europe could help the shipping company outpace Amazon.com Inc during fiscal year 2021.
FedEx shares closed higher for the sixth time in the past ten trading sessions in New York on Thursday. The stock edged up 0.11% ($0.16) to $147.02, after touching an intraday low at $146.24, or a price level not seen since October 14th ($144.39).
Shares of FedEx Corporation have retreated 8.87% so far in 2019 compared with a 27.86% gain for the benchmark index, S&P 500 (SPX).
In 2018, FedEx Corp’s stock went down 35.35%, thus, it again underperformed the S&P 500, which registered a 6.24% loss.
“If you think about all the positive things we’ve said and that we’re seeing, as we get into 2021, we will start lapping Amazon,” Alan Graf Jr., FedEx’s Chief Financial Officer, was quoted as saying by CNBC.
“Without giving you specifics, we’re at the bottom, and we’re going to come up off the mat and we’re going to improve through the rest of this year and into the next,” Graf added.
On Tuesday FedEx Corp posted weaker-than-anticipated results for its fiscal second quarter and also revised down its full-year 2020 profit forecast. It was the result of weak global economic conditions, higher costs related with ground-delivery expansion, the shift of on-line holiday sales to the third quarter and the “loss of business from a large customer,” which was later confirmed to be Amazon.
“The loss of volume from Amazon had a larger negative impact to the second quarter than the first quarter since the FedEx ground contract with Amazon expired in August,” the company’s CFO noted.
Earlier this week, Amazon said that third-party sellers would be temporarily prevented from using FedEx’s ground and home delivery services for Prime orders.
Analyst stock price forecast and recommendation
According to CNN Money, the 22 analysts, offering 12-month forecasts regarding FedEx Corporation’s stock price, have a median target of $164.00, with a high estimate of $194.00 and a low estimate of $109.00. The median estimate represents an 11.55% upside compared to the closing price of $147.02 on December 19th.
The same media also reported that 15 out of 28 surveyed investment analysts had rated FedEx Corporation’s stock as “Hold”, while 11 – as “Buy”.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
