FedEx shares tumble on weak 2020 profit outlook
The profit warning that came in just ahead of the all-important holiday shopping season for retailers, wiped off the stock’s gains for the year and prompted several brokerages to cut their price targets.J.P. Morgan was the most aggressive in slashing its price target by $22, saying growth at the company’s Express business, the largest unit, was taking a hit from delays in integration of TNT Express, a Dutch delivery company it acquired in 2016 for $4.8 billion.
“This is a transition year... we believe earnings should recover in FY21, and would obviously improve sooner if there were a trade deal between the US and China,” Cowen analyst Helane Becker said in a note. In June, FedEx ended its contract with Amazon.com Inc for U.S. cargo delivery through FedEx Express, as it focuses on moving the service in-house.
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