So far, 2018 hasn’t gone well for FedEx (FDX). The stock, which rose 34% in 2017, has fallen ~26% YTD (year-to-date). Currently, FedEx stock is trading near its 52-week low. FedEx touched its all-time intraday high in January and its 2018 low on December 17.
The YTD fall in FedEx’s share prices is also higher than the fall in the SPDR S&P 500 ETF (SPY). SPY has registered an 4.4% fall in its value YTD. So far 2018 has been a challenge for FedEx’s peers. UPS (UPS), XPO Logistics (XPO), and Saia (SAIA) shares have fallen 18.4%, 43%, and 21.8%, respectively, YTD.
Investors seeking exposure to FedEx and its competitors might want to invest in the SPDR S&P Transportation ETF (XTN). XTN has a cumulative allocation of 8.7% in these four stocks.
FedEx’s share prices have fallen YTD due to multiple headwinds. The company’s lower-than-expected EPS for the first quarter of fiscal 2019 was the main driver.
On September 17, FedEx reported an adjusted EPS of $3.46, which fell short of analysts’ projection by a wide margin of $0.35. The earnings miss was due to higher costs and expenses related to increased investments in upgrade facilities, increased TNT Express integration-associated expenses, and a rise in salaries and bonuses. FedEx’s quarterly EPS rose 37.8% from the same period the previous year.
Rising trade tensions between the US and China also kept the broader US market highly volatile throughout the year—mostly on a downward trajectory. The trade war between the US and China has already started to impact FedEx’s quarterly performance. During FedEx’s earnings conference call for the second quarter of fiscal 2019, the company’s management revealed that the ongoing tariff war impacted its businesses in China.
The surprise resignation of FedEx’s Express segment’s CEO, David Cunningham, left investors concerned. Investors wondered why Cunningham left during the company’s busiest season.