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On Tuesday, Citi analyst Ariel Rosa adjusted the price target for FedEx (NYSE: NYSE:FDX) shares, reducing it to $317.00 from the previous target of $347.00, while maintaining a Buy rating on the stock. According to InvestingPro data, FedEx currently trades at a P/E ratio of 15.48x and appears undervalued based on its Fair Value analysis. The adjustment comes ahead of FedEx’s anticipated earnings report for the third fiscal quarter of 2025, which is scheduled to be released after the market closes on Thursday.
FedEx’s shares have seen a decline of 12.8% year-to-date, underperforming in comparison to the S&P 500, which has fallen by 3.5%. Investor discussions have centered around whether FedEx will revise its full-year fiscal 2025 adjusted earnings per share (EPS) outlook, which was already reduced last quarter from $20-$21 to the current $19-$20 range.
The analyst noted that there is a significant debate among investors regarding the potential for FedEx to lower its guidance further, amidst broader concerns about the impact of tariffs and the risks to consumer and industrial activity. The sentiment towards FedEx is predominantly negative, with the consensus on the Street already below the company’s lower-end target at $18.97. InvestingPro data reveals that six analysts have recently revised their earnings estimates downward for the upcoming period, though the company remains profitable with a healthy EBITDA of $10.87 billion over the last twelve months.
Despite the downward trend in share performance and the pessimistic outlook, Rosa highlighted that the forward price-to-earnings (P/E) ratio for FedEx is near its two-year low. This is in spite of the company’s report during its second fiscal quarter earnings call that December saw strong performance. The analyst’s meetings with FedEx in January provided a more optimistic view on the company’s cost control initiatives, which may lead to third-quarter results that surpass the low expectations set by the market. For deeper insights into FedEx’s valuation and financial health, investors can access comprehensive analysis and additional ProTips through InvestingPro’s detailed research reports.
In other recent news, FedEx has announced a significant change to its financial calendar, shifting its fiscal year-end to December 31 from May 31, effective June 1, 2026. This move aims to streamline financial reporting and align with the calendar year. In addition, Bernstein has revised its price target for FedEx shares from $320 to $202, maintaining a Market Perform rating. Analyst David Vernon highlighted potential challenges such as difficult end markets and network integration issues that could affect future earnings. Furthermore, FedEx has temporarily halted economy parcel and freight services to Saudi Arabia from select countries, including Brazil and China, without specifying the reasons or timeline for resumption.
Meanwhile, Dexterity Inc., an AI robotics startup, achieved a valuation of $1.65 billion following a $95 million investment round led by Lightspeed Venture Partners. This funding round underscores the increasing interest in AI-powered machinery. Dexterity’s technology is utilized by companies like FedEx and UPS to enhance industrial productivity. In another development, Citi has adjusted the price target for GXO Logistics from $60 to $56, while maintaining a Buy rating. This adjustment reflects concerns over foreign exchange headwinds, particularly due to the company’s significant revenue generation outside the United States.
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