These Wall Street Analysts Are Wary About Shares of UPS and FedEx. Here’s Why.

A big Wall Street bank got more cautious about two U.S. shipping giants’ shares today. 

Bank of America analysts on Thursday downgraded both FedEx (FDX) and UPS (UPS), setting price targets on shares that were among the lowest on Wall Street.

The analysts cut their rating on FedEx to “neutral” from “buy,” trimming their target by $5 to $240, one of the lower ratings compiled by Visible Alpha and below the average above $269, though above recent prices. Their move on UPS was more dramatic, swapping a neutral rating for an “underperform” and setting an $83 target that is the lowest tracked by Visible Alpha and well below the mean near $107. Its shares were recently around $84.

In both cases, the downbeat changes come with the stocks in the red for the year so far as the S&P 500 has risen. 

Bank of America cited “increased pressure on volume and costs” at both companies, noting the recent move by the Trump administration to close a tariff exemption for certain low-value items. Some companies have already reported pain as a result, though others have cheered the move. 

UPS in late July reported second-quarter revenue that came in higher than expected, but disappointing profits and a decision to not provide profit or revenue forecasts pulled shares down toward current levels. FedEx suspended its outlook in June; its shares are around the price seen after that move. 

While the changes may be weighing on the shares today, both companies’ stocks were higher in recent trading as optimism about interest-rate cuts lifted stocks broadly. Read Investopedia’s full coverage of today’s trading here.