FedEx On Notice Today – Part II

FedEx On Notice Today – Part II
December 21 03:58 2018 Print This Article

Two days ago I talked about FedEx was about to announce earnings and that I was expecting more negative news to go along with my “I’m Calling The Top In The Transports.

However, price is way oversold and didn’t sell off with the Markets yesterday…only down $1.92. So FedEx is overdue for a bounce, possibly with the chance filling the gap at $200.

However, with the economy inevitably slowing down and pressure by Amazon Air, the chart suggests a $150 target is in the future for FedEx.

Source

FedEx Corp. plunged the most in a decade on Tuesday. FedEx cut their outlook just three months after raising guidance, reflecting an abrupt change in FedEx’s view of the global economy.

“The peak for global economic growth now appears to be behind us,” Raj Subramaniam, a FedEx veteran who was named this month to take over the Express cargo airline, said on a conference call with investors and analysts.


“When you have a change that comes on you as fast as this did, it’s hard to react to it,” Chief Executive Officer Fred Smith said on the conference call. “Our international business, especially in Europe, weakened significantly since we last talked with you.”

Source

FedEx dropped its 2019 earnings guidance to $15.50 to $16.60 per share. Previously, the company forecasted $17.20 to $17.80 a share.  In April, FedEx bumped compensation by $200 million among its 425,000-plus employees.  Now as part of their cost cutting measures, FedEx will offer “a voluntary buyout program” to its US employees that’s expected to save the company $225 million to $275 million.

Staying with my, “I’m Calling The Top In The Transports” theme,
the chart for UPS looks similar to FedEx. 

UPS is set to announce earnings at the end of January/beginning of February.  Since FedEx guided lower, I’m expecting UPS to guide lower as well.  Thus, the chart suggests, UPS will fall to the monthly demand at $70 as a first target. 

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

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rollandthomas
rollandthomas

I'm a retail investor like most of you and learning everyday, but I have been educated and trained to identified the Smart Money on the charts to pick up whatever crumbs they leave behind.

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