BMO cuts FedEx stock price target to $260 from $275

On Monday, BMO Capital Markets adjusted its outlook on FedEx Corp (NYSE:FDX) by reducing the stock’s price target to $260 from the previous $275, while keeping a Market Perform rating on the shares. The adjustment comes as FedEx faces ongoing challenges in the business-to-business (B2B) freight market, coupled with broader economic and policy uncertainties that cloud the forecast for demand recovery. Currently trading at $229.51, InvestingPro analysis suggests FedEx is undervalued, with a P/E ratio of 14.2x and market capitalization of $55 billion.

The analyst at BMO Capital expressed concerns over the current demand for FedEx services, which appears to be weaker than typical for the season. The lack of clarity on when the market might see an upturn has prompted a revision of earnings expectations. Consequently, BMO has lowered its earnings per share (EPS) estimates for FedEx’s fourth quarter of fiscal year 2025 by 5% and for fiscal year 2026 by 7%.

Despite the reduction in the price target and earnings estimates, BMO Capital acknowledges the positive impact of the cost-saving measures that FedEx has implemented. The analyst believes that these transformational cost savings have put FedEx in a favorable position to benefit once demand rebounds. InvestingPro data shows the company maintains a healthy 2.41% dividend yield and has consistently paid dividends for 24 consecutive years, demonstrating strong financial discipline.

The report from BMO Capital highlights significant macroeconomic and trade policy uncertainties that add to the difficulty of predicting the timing of a demand recovery. As a result, the firm’s stance remains cautious with a Market Perform rating, reflecting a neutral view on the stock’s near-term trajectory.

Investors and market watchers will be keeping a close eye on FedEx as it navigates the current demand headwinds and strives to capitalize on its cost-saving strategies. The updated price target of $260 signifies BMO Capital’s revised expectations in light of these industry and economic factors.

In other recent news, FedEx has been the subject of various analyst assessments and strategic developments. Stephens adjusted its price target for FedEx shares to $300 from $320, while maintaining an Overweight rating, following the company’s third-quarter earnings report for fiscal year 2025. FedEx posted adjusted earnings per share (EPS) of $4.51, slightly above Stephens’ projection but below the consensus estimate of $4.56. The company has also lowered its full-year adjusted EPS guidance to between $18.00 and $18.60, attributing this to softer revenue and ongoing cost inflation.

Meanwhile, BMO Capital Markets reduced FedEx’s price target to $260 from $275, retaining a Market Perform rating, due to weaker-than-expected demand and macroeconomic uncertainties. BofA Securities also made a slight adjustment, lowering the price target to $270 from $272, but kept a Buy rating on the stock, highlighting FedEx’s ongoing structural cost transformation efforts. Additionally, JPMorgan decreased its price target to $280 from $323, maintaining an Overweight rating, citing FedEx’s modest miss in third-quarter earnings and cautious fiscal year 2026 guidance.

Bernstein, however, maintained its Market Perform rating and $282 price target, following discussions on FedEx’s stance on tariffs and investor sentiment during a recent webcast. FedEx is actively addressing trade regulation changes and competitive pressures, with a focus on optimizing capacity utilization. These developments reflect the varied assessments and strategic responses as FedEx navigates current economic challenges and market conditions.

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