Logistics giants with comprehensive layout in the United States and key regions of the world$FedEx (FDX.US)$After-hours on Thursday, the company unexpectedly withdrew its guidance for fiscal 2023, which ended in May next year, suggesting that "business conditions have weakened further" during the peak freight season in the fourth quarter of this year, triggering an avalanche of share prices.

On Friday, Sept. 16, the day after the profit warning was issued, FedEx Corp fell more than 21%. The daily low of $155 hit the lowest in more than two years since the beginning of July 2020, and the biggest one-day decline in the company's history.

Meanwhile, its competitors$United Parcel Service (UPS.US)$Down by more than 4%$Amazon (AMZN.US)$Down more than 3% Deutsche Post European shares, owner of DHL, fell more than 6%, while Royal Mail UK shares fell more than 8%.

With the further expansion of the influence of the news, three large companies that produce corrugated board--$International Paper (IP.US)$、$Packaging Corp of America (PKG.US)$和$WestRock (WRK.US)$All stocks are down at least 11%. Include$Norfolk Southern (NSC.US)$和$Union Pacific (UNP.US)$The share prices of railway operators also fell.

All three major u.s. stock indexes fell on Friday, ending a week in which the s & p 500 fell 4.8% and the Dow Jones industrial average fell 4.1%.

As FedEx Corp's performance is closely linked to the vitality of the US real economy, the market often regards his earnings report as a barometer of US economic vitality. That's why Amit Mehrotra, an analyst at Deutsche Bank, called the company's reversal of its optimistic guidance three months ago "shocking".

FedEx Corp CEO even warned directly, "We are entering a global recession, and these data do not bode well for the company."He pointed out that the decline in global freight volume was the main reason for the company's "very disappointing" results in the first quarter of the fiscal year (June to August of the natural year) and the continued volatility of the operating environment. He also said that the impact of the weakness and acceleration of global freight volume around August is very far-reaching:

"this is because we reflect the business of everyone else, especially the world's high-value economies. "

Zerohedge, a financial blog known for its venomous tongue, said that apart from taking people by surprise by suddenly canceling the guidance for fiscal year 2023, FedEx Corp also pointed to Asian weakness and European challenges, and immediately opened "aggressive cost-cutting measures" such as store closures and hiring freezes, which will be waiting for the fate of most US companies. Wall Street was also shocked by the company's pessimistic warning for the year-end shopping season:

This is a terrible and tragic performance warning. No other company has hinted that the environment has been so bad before, so it's a bit strange to hear FedEx Corp make such negative remarks.

Investors should assume that Wall Street's full review of corporate EPS estimates is imminent. Especially after the Atlanta Federal Reserve sharply lowered the US GDP outlook for the third quarter on Thursday, FedEx Corp's performance warning does not bode well for the US or the global economy.

It is generally believed that FedEx Corp, as a barometer, sounded the economic alarm and was the main driver of the deep fall in its share price on Friday.A number of mainstream investment banks also immediately "followed" the downgrade of FedEx Corp's stock rating and slashed the target price. However, Wall Street is now more likely to downgrade FedEx Corp from "overweight / overweight" to "neutral / in line with the market", with only one "sell" rating.

Bank of America Corporation cut FedEx Corp's target price by 32 per cent from $275 to $186 and his rating from "buy" to "neutral", saying he cut his EPS forecast for the three-year fiscal year 2023-2025 due to the rapid macroeconomic downturn and the company's fixed cost structure.

JPMorgan Chase & Co lowered his target price by 17% from $258 to $214 and his rating from "overweight" to "neutral", saying that similar to the fourth quarter of fiscal 2022, which ended at the end of May, the company's performance was substantially driven by fuel surcharge adjustments. thus masking fundamental weaknesses for the rest of the natural year 2022:

It is "chilling" that Express may even lose money in the May-August quarter after excluding fuel surcharges. It should be the peak season, but the performance is poor, which will have a negative impact on the transport industry as a whole.

Many analysts also pointed out that FedEx Corp's poor management and execution ability led to damage to performance.Its new CEO just took over at the helm in June this year, at the beginning of the first quarter of fiscal 2023.

The Deutsche Bank analyst mentioned earlier said that in his 20-year coverage study of the company, FedEx Corp "provided the weakest set of figures compared to expectations, more than 30 per cent lower than expected":

The profits of Express Express fell sharply in the same proportion as revenue, which showed that the company could not cope with the difficulties by reducing costs, highlighted the problems with operation and implementation, and could not "make excuses" with the macroeconomic background.

Stifel analysts also believe that the weak performance is due to FedEx Corp's general transport business (Ground) division and the company's "operational mistakes" in the progress of European integration after the acquisition of TNT. In contrast, direct competitor UPS performs significantly better and gives clearer performance guidance. KeyBanc said investors' lack of confidence in FedEx Corp's management implementation made the company's short-term path "challenging":

The company just provided an optimistic outlook for fiscal 2023 and performance targets for fiscal 2025 in June, only to issue a weaker-than-expected profit warning for the first quarter of fiscal 2023 and weak guidance for the second quarter three months later. The timing and severity of its release may seriously shake the credibility of the company's future official guidance.