FedEx's (FDX) earnings warning and full year guidance retrieval put concerns about the economy into the forefront. The pre-earnings announcement also highlights the severity of the challenges facing the U.S carrier.

"To categorize the magnitude, I don't think it's an understatement to say its extreme," Jonathan Chappell, Evercore ISI senior managing director, told Yahoo Finance Live.

"A 33% miss to fiscal first quarter [earnings] estimates and an effective 50% cut to the 2nd quarter is something no one foresaw," he said .

Even though the broader transportation space has macro headwinds and the analyst is cautious on the group as a whole, Chappell says a large part of the challenges are FedEx specific.

"At this point, I think it should be placed in the penalty box until further notice. They report earnings on Thursday night," he added.

"I think the key is going to be how do they explain the sense of urgency, the timing, and the magnitude with some of these cost initiatives which they pointed out," he said. "Because it's clearly more of a FedEx issue than it is a broader transportation issue."

FedEx's biggest hit to margins came in its air express transportation, not the ground unit

The stock tanked 21% last Friday following the warning. On Monday, it was up more than 1%.

Ines Ferre is a markets reporter for Yahoo Finance. Follow her at on Twitter @ines_ferre