Will FedEx’s discontinuation of air delivery for Amazon drag on its stock?

FedEx decided not to continue the contract on air express delivery for Amazon packages. Will the FedEx stock price continue rebounding?

FedEx’s third quarter financial results were below expectations due to slowing global economies: the company reported earnings per share of $3.03, short of analyst estimates of $3.10. Net income fell to $797 million from $1.02 billion compared to the same quarter last year, with revenue rising from $16.5 billion to $17 billion. FedEx announced June 7 it will no longer provide air express delivery for Amazon packages in the US while continuing to serve as a carrier and last-mile delivery partner. Amazon accounted for only 1.3% of FedEx’s total revenue in 2018. FedEx stock dropped less than 1% on the news. FedEx’s next earnings report is scheduled for June 25. The company is expected to report earnings of $4.89 per share, a 17.26% year-over-year decline. However Zachs investment research company estimates FedEx will record a 3.75% increase in revenue from the year-ago period to $17.96 billion. FedEx’s stocks is currently trading at a forward price-to-earnings (P/E) ratio of 9.64. For comparison, its industry has an average forward P/E of 12.92, meaning FedEx’s stock is trading at a discount to the industry. While continuing global growth slowing is a downside risk for FedEx stock, the company is making investments to create new services and streamline in-house network of shipping and delivery services which should boost its competitiveness.

FDX is rising toward MA(50)  06/17/2019 Technical Analysis IFC Markets chart

On the daily timeframe the S-FDX: D1 is retracing higher after falling to six-month low in the end of May.

  • The Parabolic indicator gives a buy signal.
  • The Donchian channel indicates uptrend: it has widened up.
  • The MACD indicator gives a bullish signal: it is below the signal line and the gap is narrowing.
  • The RSI oscillator is declining but has not reached the oversold zone yet.

We believe the bullish momentum will continue after the price breaches above the upper boundary of Donchian channel at 165.79. This level can be used as an entry point for placing a pending order to buy. The stop loss can be placed below the fractal low at 158.07. After placing the order, the stop loss is to be moved every day to the next fractal low, following Parabolic signals. Thus, we are changing the expected profit/loss ratio to the breakeven point. If the price meets the stop loss level (158.07) without reaching the order (165.79), we recommend cancelling the order: the market has undergone internal changes which were not taken into account.

Technical Analysis Summary

Position Buy
Buy stop Above 165.79
Stop loss Below 158.07

This overview has an informative character and is not financial advice or a recommendation. IFCMarkets. Corp. under any circumstances is not liable for any action taken by someone else after reading this article.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD trims Williams-related gains, nears 1.1200 figure

The shared currency retreated sharply vs. its American rival after testing the 1.1280 price zone, as Fed’s representative rushed to counter Williams’ dovish words. EUR/USD at daily lows ahead of Michigan Consumer Confidence Index.


GBP/USD trading marginally lower daily basis but above 1.2500

The Pound gave back some of its Thursday’s gain on dollar’s relief. The GBP/USD pair broke a daily descendant trend line coming from June’s high and holds above it, leaving little room for sellers to act.


USD/JPY: bears pausing, still in control

Japanese National Inflation steady at 0.7%YoY in June. US Michigan Consumer Sentiment Index expected at 98.5 in July. USD/JPY corrective advance falling short of signaling an interim bottom in place.


Michigan Consumer Sentiment survey preview: The pool of happiness spreads

The University of Michigan will issue its preliminary Survey of Consumers for July on Friday July 18th at 12:30 pm GMT. Consumer sentiment expected to gain modestly in July. Optimism should be supported by strong June jobs report.

Read more

Gold consolidates around $ 1440, eyes US data for fresh direction

Gold (futures on Comex) extends its side-trend around the 1440 mark into the mid-European session, having stalled its retreat from 2019 highs of 1454 near 1437 region.

Gold News