FedEx Revenue Below 'Flattish' Expectations: 6 Analysts Dissect Earnings Miss

FedEx Corporation FDX shares rose sharply after the company reported its fiscal second quarter adjusted earnings ahead of the consensus estimates, despite a revenue miss.

Here are the analyst ratings:

• Oppenheimer analyst Scott Schneeberger maintained a Perform rating for the stock.
• Susquehana analyst Bascome Majors reiterated a Neutral rating, while raising the price target from $165 to $170.
• KeyBanc Capital Markets analyst Todd Fowler reaffirmed a Sector Weight rating on the stock.
• BMO Capital Markets analyst Fadi Chamoun maintained a Market Perform and price target of $180.
• Morgan Stanley analyst Ravi Shanker reiterated an Equal-Weight rating and price target of $130.
• BofA Securities analyst Ken Hoexte reaffirmed a Neutral rating and price target of $185.

Check out other analyst stock ratings.

Oppenheimer

FedEx reported an earnings beat even after facing substantial challenges in the fiscal first quarter, Schneeberger said in a note. “F2Q23 total revenue (-3% y/y) was below our flattish expectation, primarily in Express,” he added.

The company is targeting an incremental $1 billion in expense reduction in fiscal 2023 and is “still at a challenging juncture,” the analyst wrote.

Susquehanna

“Exiting FDX's September earnings report and deeply negative F2Q guide, our lingering near-term concern was for a super-seasonal consensus forecast for F3Q (typically FDX’s weakest quarter of year) that suggested at least one more reset ahead, as trade trends and macro indicators were still deteriorating,” Majors wrote.

“In the coming months, we expect global macroeconomic concerns and Express’s historically high operating leverage to continue to weigh on FDX’s multiple,” he further stated.

KeyBanc

“We are encouraged by modest current quarter upside, with incremental cost actions offsetting weaker demand trends that we expect to persist into F2H23,” Fowler said.

“That said, while certain comparisons may ease, our sense is visibility is generally low and broader demand trends remain lackluster, with yield growth across segments moderating somewhat,” he added.

BMO Capital Markets

“Cost savings and resilient pricing helped partially mitigate sharply declining demand,” Chamoun mentioned. The results reflected that the underlying demand trends had “weakened at a faster than expected pace across all market segments” and FedEx made “a positive step up in cost savings.”

Morgan Stanley

“FDX’s 2Q beat cons. comfortably but was much closer to our est. as accelerating cost cutting outran deteriorating market conditions, as we had previewed,” Shanker wrote in a note. “However, the FY guide implies tough 2H conditions, also as we had previewed,” he added.

BofA Securities

FedEx posted an earnings beat by aggressively cutting costs in a declining volume environment, Hoexte stated.

FDX Price Action: Shares of FedEx had risen by 3.46% to $170.04 at the time of publication Wednesday.

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