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December 19, 2018 1:00 PM, EST

FedEx Stock Takes Beating on Bleak European Outlook

FedEx Truck Christopher Dilts/Bloomberg News

FedEx Corp. shares plunged Dec. 19, after its “jarring” cut to annual forecasts and bleak commentary about European economy and global trade alarmed the market.

FedEx plunged as much as 10% as of 10 a.m. in New York, dropping to its lowest intraday price in two years, while shares of peer UPS Inc. fell more than 4%.

FedEx slashed its outlook just three months after raising the view, reflecting an abrupt change in the company’s view of the global economy amid rising trade tensions between the United States and China. The cuts were deeper than the Street expected, Morgan Stanley analyst Ravi Shanker wrote in a note.

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The company’s Express unit is likely to remain an overhang, Shanker said, as FedEx management didn’t provide an outlook for fiscal 2020 or its timeline for improving the cargo airline, which has been hit by worsening economic conditions in Europe.

FedEx Corp. is No. 2 on the Transport Topics top 100 list of for-hire carriers in North America.