Shares of FedEx Corp. (FDX) slumped 3.7% in midday trading, enough to lead the losers in the Dow Jones Transportation Average and to put them on track for a third straight decline. Analyst Todd Fowler at KeyBanc Capital lowered his earnings-per-share estimates for the package delivery service, citing "ongoing macro weakness" that is negatively impacting sales mix, as as well as integration and investment costs for FedEx's Express and Ground businesses. The cuts come ahead of FedEx's fiscal second-quarter report, which is scheduled to be released in two weeks. He cuts his second-quarter EPS estimate to $2.75 from $2.94 (the FactSet consensus is $2.86), his fiscal 2020 estimate to $12.00 from $12.25 and his 2021 estimate to $13.75 from $14.25. He reiterated his sector weight rating. "Broadly, we don't expect F2Q20 to be a positive inflection, with cost actions expected to more fully materialize late FY20/21," Fowler wrote in a note to clients. As FedEx led all 20 of the Dow transports's components lower, the Dow transports fell 2.1% while the Dow Jones Industrial Average shed 352 points, or 1.3%.
-Tomi Kilgore; 415-439-6400; AskNewswires@dowjones.com
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12-03-19 1228ETCopyright (c) 2019 Dow Jones & Company, Inc.