FedEx Slapped With Bear Note Before Earnings

The shipping giant is expected to release its quarterly report after the close tomorrow

Deputy Editor
Mar 16, 2020 at 2:36 PM
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With earnings due out after the close tomorrow, March 17, FedEx Corporation (NYSE:FDX) is struggling to overcome today's steep selloff, last seen down 11.6% at $94.24. Not helping matters is a price target cut from UBS Group to $141 from $187, though this new forecast still stands much higher than FDX's current perch. 

UBS' bear note puts the consensus 12-month price target at $163.25 -- a healthy 73.5% premium to current levels. Plus, six of the 19 analysts in coverage consider the shipping name a "buy" or better, with not a single "sell" to be seen, which could leave the door wide open for downgrades following tomorrow's report. 

The options pits have also been surprisingly bullish. In the last 10 weeks, 2.44 calls were picked up for every put at the the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio sits higher than all other readings from the past year, meaning options players haven't been more bullish during the last 12 months. 

Speaking of post-earnings sessions, a look at the last two years shows FedEx ending lower the day after earnings roughly 87% of the time, and averaging a next-day move of 6.3% regardless of direction. This time around, the option pits are pricing in a 23% post-earnings swing. 

Much like the rest of Wall Street, FedEx has been stringing together a series of record lows, and today is no exception. The equity just hit a six-year bottom of $90.86 earlier today and is already on pace for its worst month in over ten years, now off 31.6% for March.   

 

 

 

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