Why FedEx Shares Are Falling Today

FedEx Corp FDX is trading lower Wednesday after the company reported worse-than-expected earnings results and cut full-year earnings guidance before the MTM retirement plan accounting adjustments.

FedEx reported adjusted quarterly earnings of $4.37 per share, which came in below the estimate of $5 per share. The company reported quarterly revenue of $22 billion, which beat the estimate of $21.91 billion.

FedEx said its first-quarter operating results were negatively impacted by a constrained labor market which impacted labor availability and caused network inefficiencies, higher wage rates and increased purchased transportation expenses.

The company said that FedEx Express operating results declined as a result of higher operating expenses, largely driven by staffing challenges and COVID-19-related air network impacts.

“The execution of our strategies continues to drive higher demand for our services, despite the disruptive impact of the pandemic to labor availability and global supply chains,” said Frederick Smith, chairman and CEO of FedEx.

Analyst Assessment: Multiple analyst firms adjusted their outlooks on FedEx following the company's financial results:

• Keybanc analyst Todd Fowler maintained FedEx with an Overweight rating and lowered the price target from $350 to $325.
• Raymond James analyst Patrick Tyler Brown downgraded FedEx from Outperform to Market Perform.
• Barclays analyst Brandon Oglenski maintained FedEx with an Overweight rating and lowered the price target from $375 to $345.
• Wells Fargo analyst Allison Poliniak Cusic maintained FedEx with an Overweight rating and lowered the price target from $351 to $314.
• Morgan Stanley analyst Ravi Shanker maintained FedEx with an Equal-Weight rating and lowered the price target from $270 to $250.

FDX Price Action: FedEx has traded as high as $319.90 and as low as $230.27 over a 52-week period.

The stock was down 5.68% at $237.76 at time of publication.

Photo: courtesy of FedEx.