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FedEx Trades Near 52-Week Low: What’s Dragging Stock Down?

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Jun. 21 2019, Updated 2:44 p.m. ET

Stock performance

FedEx (FDX) stock has been in a downward trajectory for the last year. As of its June 20 closing price of $168.50, the stock has lost 33% of its market value in the past year. The stock of the delivery giant is trading near its 52-week low of $150.68 attained on June 3 this year and down 35% from the 52-week high of $259.25 it reached on September 17 last year.

The fall in FedEx stock is also much higher than the plunge in the iShares Transportation Average ETF (IYT). The ETF, which tracks the performance of Dow Jones transportation stocks, has fallen 4.6% in the last year. On the contrary, the Dow Jones, the S&P 500, and the NASDAQ have risen 14.7%, 17.8%, and 21.3%, respectively.

FedEx stock has also underperformed its peers. United Parcel Service (UPS) and Forward Air (FWRD) have fallen 9% and 6.3%, respectively, in the past year. Expeditors International of Washington (EXPD), another competitor, has registered a gain of 1.7% in the same timeframe.

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What dragged the stock down?

Lackluster results in two of the last three quarters and low fiscal 2019 EPS guidance are the primary reasons behind FedEx stock’s dismal performance. The US-China trade spat has also kept US stock markets volatile over the last year, pushing them mostly downward and hurting FedEx.

The company, during its third-quarter fiscal 2019 results stated that the ongoing trade war between the world’s two largest economies is affecting its business in China. Investors are worried about FedEx’s rising expenses due to delays in TNT Express’s integration, increased investment in facility upgrades and higher salaries and bonuses.

The sudden departures of two key executives, David Bronczek and David Cunningham, also worried investors. Additionally, FedEx stock got a massive blow in late May after the Chinese government announced a probe into the wrongful delivery of Huawei Technologies parcels.

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