Market Overview

I think you’ll love what you hear,
what you’ll see and the opportunities
that will be set before you.
- Jon Najarian
GET TICKETS

FedEx, UPS Shrug Off Amazon Challenge...For Now

Share:
FedEx, UPS Shrug Off Amazon Challenge...For Now

Shares of FedEx Corporation (NYSE: FDX) and United Parcel Service Inc. (NYSE: UPS) are holding up relatively well on Thursday after Bloomberg reported Amazon.com, Inc. (NASDAQ: AMZN) is testing its own delivery program called Seller Flex. Amazon has a long track record of disrupting entire businesses and crushing its competition, but shares of UPS and FedEx were both down less than 2 percent on Thursday in the wake of the news.

One of the reasons for the muted market reaction may be that Amazon’s efforts to control more of the delivery end of its business are not particularly shocking. Back in December of last year, JPMorgan analyst Brian Ossenbeck said Amazon wants to control its own destiny, but he sees its delivery expansion as more of a threat to the USPS than to UPS or FedEx.

“Amazon’s fulfillment service incentivizes sellers to increase product velocity in peak season, so its efforts to supplement capacity but not supplant UPS and FedEx hold some merit,” Ossenbeck wrote. “The USPS appears more at risk should Amazon focus on high-density urban routes.”

FedEx and UPS’ modest pullback is a far cry from the sell-offs grocery stocks endured back in June when Amazon announced its buyout of Whole Foods. Target Corporation (NYSE: TGT) shares initially tumbled 5 percent, Sprouts Farmers Market Inc (NASDAQ: SFM) dropped 7 percent and Kroger Co (NYSE: KR) stock dropped 12 percent.

Neither FedEx nor UPS demonstrated much follow-through selling on Thursday morning after their initial drops. Traders will be watching the stocks closely to see if they completely fill Thursday morning’s gap and then resume a downward trajectory or if the Amazon dip will serve as a buying opportunity.

Joel Elconin contributed to this report.

Related Link: Short Sellers Pour Into FAANG Stocks

Latest Ratings for FDX

DateFirmActionFromTo
Jun 2019MaintainsOverweight
Jun 2019MaintainsSell
May 2019MaintainsEqual-Weight

View More Analyst Ratings for FDX
View the Latest Analyst Ratings

Posted-In: Brian Ossenbeck JPMorganAnalyst Color Analyst Ratings Best of Benzinga

 

Related Articles (AMZN + FDX)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
MCDMaintains200.0
AVGOMaintains300.0
AVGOMaintains315.0
CASYMaintains152.0
MRKMaintains93.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

What Would A T-Mobile-Sprint, All-Stock Merger Look Like, And Is It Likely?

Google's Hardware Strategy, Explained