FedEx has shed half its market value in the past 2 years, and Morgan Stanley says investors should brace for another ‘volatile’ quarter for the package giant
- FedEx has shed half its market value since January 2018 — and the free fall doesn’t appear to be stopping soon.
- Morgan Stanley warned in a note to investors on March 2 that the $65.5 billion company will have another “volatile” quarter.
- This time, coronavirus is the culprit.
- Credit Suisse analysts wrote in a March 4 note that coronavirus-induced manufacturing declines will slash $1 billion from FedEx’s top line this quarter.
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FedEx has had a rough few years, with its market capitalization plunging from $71.3 billion in January 2018 to $36.5 billion as of March 2020. It’s struggled for a slew of reasons, including competition with Amazon.
But there’s now a new factor threatening to harm its stock even further, according to Morgan Stanley: coronavirus.
Over the past couple of years, the two biggest factors behind FedEx’s struggles have been the encroaching threat from Amazon’s growing transportation network and unexpected costs following the acquisition of European package company TNT. In its March 2 note to investors, Morgan Stanley added the coronavirus — which has already hit the markets hard — to the mix.
The freight-transportation team, led by analyst Ravi Shanker, wrote to investors that they expected …continued .
[Source: Business Insider]