UBS lowered its third-quarter EPS estimate for FedEx (NYSE:FDX) in a note Friday, saying they believe the difficult January weather pressured the company’s Express performance.
“FDX experienced a challenging weather backdrop in January with unusually high snowfall in key areas of their Express network and 9 consecutive days of national service disruption (plus one in December) versus a normal backdrop of ~5 days of weather disruption during 3Q,” explained analysts at the bank.
Against this backdrop, analysts believe Express may only be around breakeven in 3Q, while volumes were likely muted.
“We are lowering our 3Q and 4Q EPS estimates to reflect the weather headwind to Express performance in 3Q and a more cautious view on Express margin in 4Q,” added the firm. “Our 3QF24 EPS is now $3.20/share (vs prior of $3.32), which is further below consensus of $3.57/share.”
UBS maintained a Buy rating and a $323 price target on the stock.
