One of the world’s largest logistics firms, FedEx Corp. (NYSE:FDX), is working on cutting its shipment volume forecasts for this fiscal year amid expectations of lower-than-usual holiday shipping. The new volume guidance will be out on or about October 21.
FedEx Ground, FedEx’s unit that takes care of e-commerce deliveries, sent a message to 6,000 independent contractors regarding a possible volume softness around the holidays, as reported by Reuters on Friday. The holiday season is usually the busiest time of the entire year. However, heading into the holidays with the fear of a recession and inflation concerns, consumers are expected to spend less.
The news is another indicator that the economy is indeed slowing down. Moreover, this is also unwelcome news for FedEx, which derives more than 40% of its operating income from the Ground division.
The update comes about a month after the company reported over 20% decline in profits in the fiscal first quarter, and withdrew its full fiscal year guidance amid a weakening macroeconomic environment.
Is FDX Stock a Buy?
Being one of the biggest and most trusted brands for shipping, Wall Street is cautiously optimistic on FedEx stock, with a Moderate Buy consensus rating based on 11 Buys and 10 Holds. The average price target for FDX stock is $209.05, indicating a 35.4% upside potential to the current price.
