Another blow to FedEx and the global economic outlook. The package delivery company's shares dropped 6 percent Wednesday morning after several Wall Street analysts cut their price targets on the stock. Investors expressed disappointment over FedEx's move to cut its full year profit forecast. That's the second time it did that in three months. Wall Street is concerned because FedEx and other couriers are considered bellwethers for the global economy.
Again, FedEx cited the deceleration in global trade, which has been racked by uncertainties over Brexit and the trade war between the U.S. and China. This time, it also blamed the slowing global economy and weakness in its International Express business.
Reuters transportation reporter, Nick Carey:
SOUNDBITE: REUTERS TRANSPORTATION REPORTER, NICK CAREY (ENGLISH) SAYING:
"When they're blaming the economy you have to take that with a pinch of salt because Deutsche Post, which owns DHL earlier this month said we're not seeing any weakening in the global economy. I think the bigger problem with FedEx by far is TNT in Europe."
JPMorgan downgraded the stock and cut its price target, saying it expects "turbulence" in the near future. FedEx was the biggest decliner on the S&P 500 Wednesday.