The downtrend in shares of FedEx (FDX) continued. Down 18.13% year-to-date, the parcel shipper disappointed investors when it lowered its guidance for FY 2025.
FedEx cut its outlook for three straight quarters. The firm anticipates a weaker industrial outlook ahead. This may pressure shipping volumes. B2B volumes weakened, which hurt FedEx’s hopes for sustaining higher margins. In the last quarter, freight volumes continued to weaken as shipments and lower weights hurt its results.
The company posted revenue of $22.2 billion (+2.3% Y/Y). The growth is below the inflation rate, so the real growth is negative. FedEx took advantage of the weak stock to buy back 1.8 million shares. The outstanding share decrease benefited the earnings per diluted share by $0.12.
FedEx still has $2.6 billion available to buy back its stock. Still, FDX stock is now trading below its 200-day moving average. The stock is below a trading channel range of $235 - $300 that started in late 2023.
Related Investment: UPS
Investors may consider buying UPS (UPS) instead of FDX stock. UPS pays a dividend that is more than double that of FDX stock. While fewer shipments will hurt both firms, FedEx cannot replace the business it lost from Amazon (AMZN).
J.B. Hunt Transport (JBHT) and the SPDR S&P Transportation ETF (XTN) are other related investments to consider.
