FedEx Posts 2Q Miss, With Continued Cost Inflation: Here's What To Watch Next

Shares of FedEx Corp (NYSE:FDX) tanked in early trading Friday after the company reported downbeat fiscal third-quarter results.

Here are some key analyst takeaways.

Stifel On FedEx

Analyst Bruce Chan maintained a Buy rating, reducing the price target from $364 to $354.

FedEx reported adjusted earnings of $4.51 per share, missing consensus of $4.56 per share, despite a share buyback tailwind of 12 cents per share, Chan said in a note. "Total revenues were higher than we’d anticipated, with notable upside in legacy Ground volumes," he added.

Chan stated that yields were softer than expected due to a mixed shift towards Economy products. "Management took fiscal year-end guidance down by 6% at the midpoint due to yield pressure, soft industrial, macro uncertainty, and residual inflationary cost pressure, particularly on wages and purchased transportation."

Stephens On FedEx

Analyst Daniel Imbro reiterated an Overweight rating, cutting the price target from $320 to $300.

FedEx reduced its fiscal 2025 adjusted earnings guidance to $18.00-$18.60 per share due to softer revenues and continued cost inflation, Imbro said. On the positive side, the company achieved around $600 million in DRIVE savings in the fiscal third quarter and remains on track to reaching its $2.2 billion target this year, he added.

Apart from DRIVE savings, Network 2.0 should also support the company's EBIT in fiscal 2026, the analyst stated. "The LTL spin remains on track, and we expect a CEO announcement for the spin-co to be the next watch item for investors."

Check out other analyst stock ratings.

Goldman Sachs On FedEx

Analyst Jordan Alliger reaffirmed a Buy rating and price target of $314.

Although FedEx reported quarterly earnings of $4.51 per share, the figure falls to $4.32 per share when stripping off the 19 cents per share tax benefit, Alliger said "The shortfall versus our numbers was at Freight, as well as somewhat higher interest expense/lower Other income."

On the positive side, FedEx Express recorded higher-than-expected EBIT, with some sequential margin expansion, exhibiting "counter-seasonal improvement," the analyst stated. "The underlying business fundamentals particularly around B2B/industrial volumes remains generally soft," Allinger wrote.

Oppenheimer On FedEx

Analyst Scott Schneeberger maintained a Perform rating on the stock.

The Express segment, which now includes Ground, generated revenue and adjusted operating income growth of 2.7% and 16.9% year-on-year, respectively, Schneeberger said. Growth was driven by "DRIVE expense reductions/higher base yield/increased US and international export volume, partly offset by higher wage and PT rates/expiration of the USPS contract," he added.

Schneeberger stated that the mid-point of management's earnings estimate, at $18.30 per share, missed consensus of $18.94 per share. "FedEx now anticipates flat to slightly down y/y FY25 revenue growth vs. ~flat y/y a quarter ago."

FDX Price Action: At the time of publication on Friday, shares of FedEx had declined by 9.01% to $224.01.

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