RIGA, LATVIA – 2020/03/04: A car drives past a FedEx van in Riga. (Photo by Omar Marques/SOPA … [+]
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Going by trends seen during the 2008 crisis, Fedex’s (NYSE: FDX) stock could potentially grow at a 2x pace compared to the broader market, when the crisis is over. We compare the performance of Fedex vis-à-vis the S&P 500 in our interactive dashboard analysis, 2007-08 vs. 2020 Crisis Comparison: Fedex Stock Compared with S&P 500. So far, Fedex’s stock has underperformed the broader markets in the recent coronavirus and oil price war related market crash. The stock has declined 26% since early February, as compared to 18% fall for S&P 500. Fedex stock was already facing the pressure from worries of a slowdown in China, even before the outbreak of coronavirus. In fact, the stock has declined 40% over the last 12 months. Now with the coronavirus outbreak, there are fears of recession in the global economy. This will directly hit the shipments of the transportation companies, including Fedex.
The Cass Freight Index, which is closely monitored to gauge shipping activity, fell 7.5 % y-o-y in January, and it is expected to be lower in February as well. On the positive side, lower crude oil prices will benefit the transportation companies with their fuel costs. In the case of Fedex, fuel accounted for 6% of its total expenses in fiscal 2019, as shown in our Fedex Expenses dashboard. Among other actions, Fedex recently announced the retirement of its CFO later this year, and the company is expected to report its Q3 fiscal 2020 earnings on March 17.
The stock price move over the next few days will be dependent on multiple factors, especially its performance over the past quarter. Having said that, the recent market crash surely added fuel to the fire, and hence we see underperformance as compared to the broader markets. But if one were to go by the trends seen in the 2008 crisis, Fedex stock could see a stellar rebound, when the crisis winds down, as shown in our interactive dashboard analysis, 2007-08 vs. 2020 Crisis Comparison: Fedex Stock Compared with S&P 500.
Fedex Stock vs. S&P 500 Over 2020 Coronavirus/Oil Price War Crisis
- Fedex’s stock declined by 16.5% between Monday, March 9th, and Friday, March 13th, and the stock is down by 25.9% since February 1st, after the WHO declared a global health emergency.
- The S&P 500 declined by 8.8% between Monday, March 9th, and Friday, March 13th, and it has fallen by 18.5% since February 1st.
- In comparison, UPS’ stock has shown better performance, as it declined only 8% since February 1st. UPS appears to be better placed as compared to Fedex in the near term, given Amazon being its primary customer, and accounting for 10% of the company’s total revenue.
- We also compare the current coronavirus crash to 4 other market crashes here.
Fedex Stock vs. S&P 500 Over 2007-08 Financial Crisis
- Fedex stock declined from levels of around $96 in October 2007 (the pre-crisis peak) to levels of around $39 in March 2009 (as the markets bottomed out) and recovered to levels of about $77 in early 2010.
- Through the crisis, Fedex stock declined by as much as 46% from its approximate pre-crisis peak. This marked a slightly lower decline as seen in the broader S&P, which fell by as much as 51%.
- Fedex stock saw massive recovery from the lows, rising by over 94% between March 2009 and January 2010. The growth was almost 2x higher than the S&P, which rose by about 48% over the same period.
- While Fedex stock has declined due to the coronavirus and oil price war crisis, among other factors, going by trends seen during the 2008 slowdown, it’s likely that it could bounce back strongly, when the crisis winds down, and the growth from lower levels could potentially be much faster than the broader S&P.
For more detailed charts and a timeline of the 2008 and 2020 crisis for different stocks, view our interactive dashboard analyses on coronavirus.