(CercleFinance.com) – Credit Suisse indicated on Friday that it was “cautiously” renewing its “outperformance” opinion on FedEx, while lowering its price target on the stock from $314 to $246 following the severe profit warning issued by the group last night.
According to the analyst, investors will have to make a difficult choice regarding the messaging giant, namely to determine whether its difficulties are cyclical or more structural in nature.
On the one hand, notes Credit Suisse, its managing director told the CNBC financial news channel that he now expects a “global recession” given the weakness of activity in Asia, the difficulties encountered in Europe and the sluggishness of online commerce.
“FedEx acknowledged that it had been taken aback by the speed and magnitude of the decline in business volumes, which did not allow it to adjust its costs quickly enough to preserve its results”, adds- he.
More encouraging element, however, underlines the professional, Raj Subramaniam assured that he remained confident in the achievement of the long-term financial objectives which had been unveiled in June.
‘Conversely, we noted a significant level of skepticism among investors regarding the ability of the management team to achieve long-term objectives’, worries the broker.
‘Given the disappointment of the day before, such skepticism seems increasingly justified,’ he concludes.
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