Logistics majors FedEx (NYSE:FDX) and United Parcel Service’s (NYSE:UPS) Indian units are being investigated for antitrust practices in the country. Authorities in the country are investigating these logistics players for colluding on discounts and prices. According to Reuters, DHL’s (DE:DHL) Indian operations are part of the probe as well. Further, the Competition Commission of India (CCI) is poring over “Hundreds of thousands of emails” to investigate the tariffs charged by logistics companies for airport services.
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The investigation in India commenced in October 2022 following complaints from publishers (the Federation of Indian Publishers) of collusion on charges and discounts by multiple logistics companies in the country. Allegedly, logistics companies exchanged information regarding volumes and fees on airport services before arriving at any rates.
Nevertheless, FedEx has denied the allegations and is cooperating in the probe, according to Reuters. If the allegations are proven, these logistics companies could face fines to the tune of 10% of their yearly revenues or nearly three times the profits generated in every year prices were found to be fixed.
Is FDX a Good Stock?
Over the past year, while FDX shares have gained 35%, UPS stock has tanked by over 11%. The Street expects FedEx’s outperformance to continue with a 22% potential upside based on an average FDX price target of $299.40 and a Moderate Buy consensus rating.
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