FDX Down 10% In A Week. How Confident Are You In The Stock?

FedEx (FDX) stock is down 10.3% in 5 trading days. While history suggests price dips recover, there is risk – specific to profitability, balance sheet and downturn resilience. Consider the following data:

• A $52 Bil company with $88 Bil in revenue currently trading at $217.49.
• Last 12 month revenue growth of 0.3% and operating margin of 6.8%.
• Has Debt to Equity ratio of 0.7 and Cash to Assets ratio of 0.1
• Currently trading at P/E multiple of 13.3 and P/EBIT multiple of 8.3
• Has returned (median) 120% within a year following sharp dips since 2010. See FDX Dip Buy Analysis.

While we like to buy dips if the fundamentals check out – for FDX, see Buy or Sell FDX Stock – we are wary of falling knives. Specifically, it is worth trying to answer if things get really bad, and FDX drops another 20-30% to $152.24 levels, will we be able to hold on to the stock? What is the worst case scenario? We call it downturn resilience.

Below is a deep dive into FedEx (FDX) downturn resilience – specifically, its performance vs the market during past crises? Turns out, the stock has fared worse than the S&P 500 index during various economic downturns.

FDX provides transportation, e-commerce, and business services including express and ground delivery, freight, sales, marketing, IT, customer support, and billing both domestically and internationally.

2022 Inflation Shock

• FDX stock fell 54.7% from a high of $315.59 on 27 May 2021 to $142.90 on 26 September 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
• The stock is yet to recover to its pre-Crisis high
• The highest the stock has reached since then is $313.52 on 16 July 2024 , and currently trades at $217.49

• FDX stock fell 45.1% from a high of $164.91 on 20 February 2020 to $90.49 on 16 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 16 July 2020

• FDX stock fell 49.6% from a high of $274.32 on 19 January 2018 to $138.39 on 8 October 2019 vs. a peak-to-trough decline of 19.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 14 October 2020

• FDX stock fell 71.7% from a high of $120.97 on 23 February 2007 to $34.28 on 9 March 2009 vs. a peak-to-trough decline of 56.8% for the S&P 500.
• However, the stock fully recovered to its pre-Crisis peak by 16 October 2013