Shares of FedEx Corp. (FDX), already lagging the market this year and plunging 5% on Tuesday, may fall further as the U.S.-China trade war bites into the delivery giant's profits, according to one team of bears and as outlined in a recent Barron's report. The stock is now more than 10% off its high this year, completely missing the market rebound following January's larger correction. 

Delivery Giant Misses Targets

A handful of analysts on the Street have slashed their earnings and stock targets for FedEx after the company said that the trade conflict had already impacted 10% of its China sales. Bears fear that negative headwinds are set to accelerate as President Trump adds $200 billion in Chinese goods to his tariff list, slated to take effect on Sept. 24. 

Closing up 0.5% on Wednesday at $242.88, FedEx stock reflects a 2.7% loss year-to-date (YTD), underperforming its rival United Parcel Services (UPS), which has also fallen 0.8% YTD, and the broader S&P 500's 8.8% return over the same period.

FedEx Stock Lags the Market

Index/Company YTD Performance
S&P 500 8.8%
Dow Jones Industrial Average 6.8%
FedEx -2.7%

FedEx missed the Street's earnings expectations in the recent quarter, posting earnings per share (EPS) of $3.46 on revenue of $17.05 billion compared to the consensus at $3.83 and $16.88 billion. As for full year 2018, the delivery company upped its forecast for EPS of $17.50 at the midpoint compared to its previous forecast at $17.40 and the Street's average estimate of $17.39. 

While demand for deliveries, better rates and lower taxes boosted results, profits took a bite on larger bonuses to management and an increase in salary for hourly workers. 

Bulls Stick to Upbeat Long-Term Forecast

In light of the report, Credit Suisse lowered its price target on FedEx shares down from $315 to $307, still implying a 26.4% upside from Wednesday close. Analyst Allison Landry indicated that she "wasn't thrilled" with results yet agrees with management that the numbers don't tell the full story, including an expected improvement long-term pricing. (For more, see also: FedEx Delivers Earnings Below Its Quarterly Pivot.)

Credit Suisse Trims Price Target

Previous: $315 
Current: $307

Barclays also remains bullish on FedEx, despite lowering estimates on the "softer-than-expected results" and noting that improved FY outlook is "a bit perplexing." Analyst Brandon Oglenski reiterated his overweight rating and $310 price target on FedEx stock. 

FedEx is one of many global corporations that have taken a hit on heightened trade tensions. While China only accounts for 2% of FedEx's total top line, executives indicated in the earnings call that trade tensions have spilled over into the broader economy, creating a more cautious business environment and slowing down economic activity. 

FedEx's fears echo warnings from other global corporations and market watchers who indicate that equities could fall in the double digits if the trade war continues. Ian Hissey, the vice president of FactSet's portfolio analytics group, told CNBC that effects could be "widespread" and that global equities could fall between 8% and 17%.