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April 8, 2020, 9:04 a.m. EDT

FedEx, UPS stocks surge after WSJ report of Amazon halting competing service

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By Tomi Kilgore

Shares of FedEx Corp. /zigman2/quotes/203047719/composite FDX -0.56% surged 5.0% and of United Parcel Service Inc. /zigman2/quotes/201245396/composite UPS -1.24% rallied 4.2% in premarket trading Wednesday, after The Wall Street Journal reported that Amazon.com Inc. /zigman2/quotes/210331248/composite AMZN +0.31% was halting a delivery service known as Amazon Shipping that directly competes with the package delivery services. J.P. Morgan analyst Brian Ossenbeck kept his ratings at neutral for both FedEx and UPS, but said he expects the stocks to react "favorably" to the WSJ report. "The news reads slightly more positive for FedEx considering it no longer ships for Amazon and was viewed as at risk for direct competition," Ossenbeck wrote in a note to clients. "However, we expect UPS will also benefit on news its largest customer has suspended a competing service for non-Amazon volumes, but we expect Amazon will continue to insource its own deliveries over time." The WSJ report out late Tuesday, which cited people familiar with the matter, said Amazon was suspending the Amazon Shipping service, which was available in only a handful of cities, because it needed its people and capacity to handle a surge in its own customers' orders. Shares of FedEx have lost 23.3% year to date through Tuesday and of UPS have declined 20.6%, while Amazon's stock has gained 8.9% and the Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.04% has declined 20.6%.

/zigman2/quotes/203047719/composite
US : U.S.: NYSE
$ 286.70
-1.60 -0.56%
Volume: 769,899
Nov. 27, 2020 12:21p
P/E Ratio
18.89
Dividend Yield
0.91%
Market Cap
$75.71 billion
Rev. per Employee
$282,518
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/zigman2/quotes/201245396/composite
US : U.S.: NYSE
$ 168.39
-2.11 -1.24%
Volume: 1.58M
Nov. 27, 2020 12:21p
P/E Ratio
31.91
Dividend Yield
2.40%
Market Cap
$147.38 billion
Rev. per Employee
$149,327
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/zigman2/quotes/210331248/composite
US : U.S.: Nasdaq
$ 3,194.88
+9.81 +0.31%
Volume: 1.78M
Nov. 27, 2020 12:21p
P/E Ratio
93.82
Dividend Yield
N/A
Market Cap
$1598.11 billion
Rev. per Employee
$351,531
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/zigman2/quotes/210598065/realtime
US : Dow Jones Global
29,860.07
-12.40 -0.04%
Volume: 126.63M
Nov. 27, 2020 12:21p
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