FedEx Faces an Uncertain Future
FedEx Corporation (NYSE: FDX) has lost $25 billion in market value after the stock plunged 40% over the last year. But it hasn't reached zero yet, which means the losses could continue. Analysts predict that the price is likely to slide even further due to the trade war between China and the United States.
FedEx recently lowered its annual profit forecast for a number of reasons, including high operational costs, low revenues, and the economic effects of the U.S.-China trade war. China is a huge market for FedEx, and growth there was very slow over the past two months.
The company has missed earnings per share in two of the past four quarters, and there are many headwinds that could prove challenging in the short term. Weak economies clearly mean less spending and less shipping, so companies such as Walmart (NYSE: WMT) will need less items on their shelves. Shipping of heavy equipment through FedEx Freight would also decline.
Source Fool.com
