FedEx falls 15% after disappointing results, bearish signals raise red flags for investors – FedEx (NYSE:FDX)

FedEx Corp FDX has hit a rough patch, and its latest quarterly results have investors worried. Shares were down more than 15% by midday Friday after the earnings news, erasing gains made in the last quarter.

Despite the decline, FedEx investors have only seen a 1.56% gain over the past year and less than 1% year to date.

Financial results below expectations: difficult quarter for FedEx

In reporting first-quarter revenue and profit that missed analysts’ expectations, the logistics giant said it had been a “challenging quarter” due to a decline in domestic priority mail volume in the U.S. and an increase in wage and transportation costs. The news prompted FedEx to reassess its growth trajectory.

The company revised down its full-year guidance and now projects revenue growth in the low single-digit range for fiscal 2025.

Morgan Stanley’s Ravi Shanker downgraded FedEx from Equal-Weight to Underweight, lowering his target price on the stock from $215 to $200.

Baird, meanwhile, maintained an Outperform rating but lowered its target from $340 to $320, reflecting some optimism despite the current challenges.

Also read: Shares of shipping giants FedEx and UPS fall on Friday: What’s going on?

FedEx Stock Chart Deep in Bear Territory

FedEx’s technical indicators offer little relief to investors amid the turmoil.

The stock is currently trading below its 5-, 20- and 50-day exponential moving averages, signaling a strong downtrend. This comes after the stock price fell on Friday.

Chart created with Benzinga Pro

At the current share price of $254.36, the stock is firmly in bear territory according to its moving averages. The 8-day, 20-day, and 50-day SMAs (simple moving averages) are all well above the current share price, giving bearish signals. Even the 200-day SMA is above it at $267.43, strengthening the long-term bearish momentum.

Also read: FedEx posts weaker Q1 results, lowers forecasts: Why analysts see more declines ahead

Chart created with Benzinga Pro

Caution is advised. The MACD (Moving Average Convergence/Divergence) is negative 1.77, signaling bearishness, and the RSI (Relative Strength Index) of 26.67 indicates oversold conditions. While an oversold RSI is generally an indicator of a potential rebound, the extent to which shares are currently in deep bear territory could make a rebound difficult in the short to medium term.

Once FedEx stock begins trading above its 200-day moving average, investors should monitor oscillators for potential changes in events.

FedEx’s latest earnings report and analyst downgrades are raising concerns, which are reflected in the stock’s technical indicators.

As the company grapples with these headwinds, investors should remain vigilant as they consider potential catalysts in the context of the risk of an economic slowdown.

Read more:

Photo: Shutterstock