The company’s stock may face selling pressure in the future due to a most recent profit warning and amid worries of a global economic slowdown.

Shares of FedEx Corporation (NYSE:FDX) are currently trading near the 52-week low price of $142.49 and near the 3-year low of $147.82. On September 17, 2019, the company reported as expected the first quarter results for the year 2020. The explanation for this decline can be attributed to two significant factors, both of which could continue to add selling pressure for the stock.

1. Most recent profit warning and weak outlook for year 2020

On September 17, 2019, the company reported as expected the results for the first quarter of the year 2020. The stock fell almost 13% at the close the following day. This happened because the company both missed expectations and lowered its financial outlook for the year 2020. The company earned $745 million, or $2.84 a share (diluted EPS) in the first quarter of 2020, compared with $835 million, or $3.10 a share, in the first quarter of 2019. The adjusted (non-GAAP) results were net income of $800 million, or $3.05 a share, compared with $933 million, or $3.46 a share, in the same period one year ago. The analysts had expected adjusted earnings of $3.15 a share.

But most importantly, the weak outlook for the year 2020 was the leading cause of the sell-off. In its latest first-quarter earnings report for the year 2020, the company announced that “FedEx is lowering its fiscal 2020 earnings forecast as the company’s revenue outlook has been reduced due to increased trade tensions and additional weakening of global economic conditions since the company’s initial fiscal 2020 forecast in June.  The company’s revised outlook also reflects increased FedEx Ground costs and August’s loss of FedEx Ground business from a large customer. Also, the FedEx ETR is now expected to be 24% to 26% before the year-end MTM retirement plan accounting adjustment, due to lower-than-expected earnings in certain non-U.S. jurisdictions.”

2. Trade war uncertainties and global economic slowdown, also the loss οf a contract with Amazon lead to cost-cutting measures

“Our performance continues to be negatively impacted by a weakening global macro environment driven by increasing trade tensions and policy uncertainty,” said Frederick W. Smith, FedEx Corp. chairman, and chief executive officer. The company is pessimistic about its future financial performance due to a mix of global economic turbulence, mainly the trade tensions between U.S. and China adding the fact that in August 2019 a partnership with Amazon.com, Inc. (NASDAQ:AMZN) ended. A long-term cooperation between FedEx and Amazon over the years turned to competition between them. “We basically compete in an ecosphere that’s got five entities in it. There’s UPS, there’s DHL, there’s the U.S. Postal Service, and now increasingly, there’s Amazon. That’s who we wake up every day trying to think about how we compete against and give the best services to our sales force.’ said FedEx CEO Fred Smith.

The Organisation for Economic Co-operation and Development (OECD) in its latest global economic outlook issued a warning for lower economic growth in the future. Some of the key points are:

• “The global outlook has become increasingly fragile and uncertain. Global growth is projected to slow to 2.9% in 2019 and 3% in 2020. These would be the weakest annual growth rates since the financial crisis, with downside risks continuing to mount.”

• “Escalating trade policy tensions are taking an increasing toll on confidence and investment, adding to policy uncertainty, weighing on risk sentiment in financial markets, and endangering future growth prospects.”

• “Growth has been revised down in almost all G20 economies in 2019 and 2020, particularly those most exposed to the decline in global trade and investment that has set in this year.”

These points seem to be very pessimistic and have the potential to influence the financial performance of FedEx in the future negatively. All these factors are significant for investors, and weak financial performance may spell more trouble for FedEx’s stock in 2019 and 2020.