FedEx Inc. shares rose 2.4% Thursday, after UBS upgraded the stock to neutral from sell and said per-share earnings expectations for 2020 offer a low bar. The stock has fallen 20% since touching its high for the year on April 18, while rival UPS has seen its stock rise 2% and the S&P 500 has gained 8%. At the same time, consensus EPS estimates have fallen 28%. "While we do not anticipate near term improvement in financial results from FedEx we believe FDX reflects the bad news and we no longer see a catalyst for further downside," analysts led by Thomas Wadewitz wrote in a note. FedEx's challenges for the second quarter include a weak cyclical backdrop, the lack of a replacement for lost Amazon business, difficulty taking capacity and cost out ahead of peak season and the timing of cyber week, which fell entirely in the third quarter this year," said the note. UBS is lowering its second-quarter EPS estimate to $2.90 from $3.12 and said downside to that forecast is more likely than upside. The bank raised its stock price target to $161 from $132. Shares have gained 0.9% in 2019, while the S&P 500 has gained 25%.
-Ciara Linnane; 415-439-6400; AskNewswires@dowjones.com
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