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Stephens lowered its price target on FedEx (NYSE:FDX) to $280 from $300 on Tuesday while maintaining an Overweight rating on the stock, citing ongoing macroeconomic challenges affecting the company’s parcel and LTL businesses. According to InvestingPro data, FedEx currently trades at $226.77, with analyst targets ranging from $200 to $354, suggesting potential upside despite recent challenges. The stock appears slightly undervalued based on InvestingPro’s Fair Value analysis.
The research firm noted that international demand has underperformed expectations based on commentary from recent industry conferences. While core U.S. pricing remains stable, it could continue to be impacted by customer trade-down behavior, according to Stephens. Despite these challenges, FedEx maintains strong fundamentals with $87.81 billion in revenue and a P/E ratio of 14.05. InvestingPro analysis reveals 8 analysts have recently revised their earnings expectations downward for the upcoming period.
The firm’s analysis indicates that less-than-truckload (LTL) mid-quarter updates from industry peers suggest below-seasonal trends through May, prompting Stephens to adjust its tonnage and margin assumptions downward. The firm expects these demand headwinds to persist, though a recent fuel surcharge increase will help mitigate some of the top-line impact.
Stephens will be monitoring updates on FedEx’s recent Amazon (NASDAQ:AMZN) business win and leadership developments for the company’s "RemainCo" as leadership positions are being filled for the planned LTL spin-off.
Despite near-term macroeconomic challenges, Stephens remains optimistic about FedEx’s continued DRIVE savings program in fiscal year 2026, which it believes will create a more streamlined RemainCo and opportunities for value creation through the spin-off. InvestingPro rates FedEx’s overall financial health as FAIR, with detailed metrics and analysis available in the comprehensive Pro Research Report, one of 1,400+ deep-dive company analyses available to subscribers.
In other recent news, FedEx has announced an increase in its annual dividend by 5%, bringing it to $5.80 per share for fiscal year 2026. This marks the fifth consecutive year of dividend growth, reflecting the company’s commitment to enhancing stockholder value. Analysts from Bernstein have expressed concerns about FedEx’s ability to meet earnings estimates for fiscal year 2026 due to challenges in bridging initiatives between its DRIVE program and future Network 2.0 integration. Wolfe Research has also adjusted its outlook, lowering the price target for FedEx stock while maintaining an Outperform rating, citing upcoming earnings as a factor. Truist Securities continues to recommend buying FedEx stock, highlighting the potential value from the planned spin-off of FedEx Freight in June 2026. Meanwhile, JPMorgan has lowered its price target for FedEx, pointing to stagnant demand and tariff uncertainties. Analysts anticipate that FedEx’s upcoming earnings call will address key topics such as capacity utilization and recent contracts, including one with Amazon. Despite these challenges, FedEx’s EPS guidance for fiscal year 2026 is expected to align closely with consensus estimates.
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