FedEx Stock Is Down 8% In A Month But Will The Fall Continue?

FDX: FedEx logo

The stock price of FedEx (NYSE: FDX) has seen a fall of over 8% over the last twenty-one trading days, and it is up only 8% year-to-date, compared to a rise of 19% for the broader S&P500 index. While the company reported an in-line quarterly performance in Q4 fiscal 2021,  FDX stock fell after its peer – UPS – reported its Q2 numbers with a decline in ground shipments, a metric that drove the earnings for both FedEx and UPS since the beginning of the pandemic, as people stayed at home and ordered goods online. But now with over half of the U.S. population fully vaccinated, economies are opening up, and people have started to venture out, impacting the overall ground shipment volume. Investors now fear that if this trend were to continue it may impact the overall earnings growth for these companies.

But now that FDX stock has moved -8.5% over the last month, will it continue its downward trajectory, or is a rise imminent? Going by historical performance, there is a good chance of a rise in FDX stock over the next month. Out of 244 instances in the last ten years that FDX stock saw a twenty-one day fall of -8.5% or more, 163 of them resulted in FDX stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 163 out of 244, or about a 67% chance of a rise in FDX stock over the coming month. See our analysis on FedEx Stock Chances of Rise for more details.

Calculation of ‘Event Probability‘ and ‘Chance of Rise‘ using last ten years data

  • After moving -1.3% or more over a five-day period, the stock rose in the next five days on 59% of the occasions.
  • After moving -0.9% or more over a ten-day period, the stock rose in the next ten days on 58% of the occasions
  • After moving -8.5% or more over a twenty-one-day period, the stock rose in the next twenty-one days on 67% of the occasions.
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Predict average return on FedEx (FDX) Stock Return: AI Predicts FDX Average and Excess Return After a Fall or Rise

FedEx (FDX) Stock Return (Recent) Comparison With Peers And S&P500

  • Five-Day Return: UPS highest at 1.2%; AMZN lowest at -2.8%
  • Ten-Day Return: XPO highest at 3.8%; AMZN lowest at -4.6%
  • Twenty-One Days Return: SPY highest at 1.9%; XPO lowest at -38%

We continue to believe that FedEx remains an attractive pick at its current levels of around $270. While the concern over falling ground shipments is valid, it was not surprising, and we believe that despite the near term declines, the overall ground shipment volumes are likely to remain higher compared to the pre-pandemic levels. As such, investors can use the recent dips as a buying opportunity for long-term gains.

While FDX stock may see higher levels, 2020 has created many pricing discontinuities which can offer attractive trading opportunities. For example, you’ll be surprised how counter-intuitive the stock valuation is for Edison International vs FedEx.

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