FedEx stock downgraded by Evercore ISI amid demand headwinds

Investing.com - FedEx (NYSE:FDX), the $53.8 billion air freight and logistics giant, was downgraded by Evercore ISI from Outperform to In Line with a price target reduction to $243.00 from $249.00, citing ongoing demand headwinds that could impact near-term earnings estimates. According to InvestingPro data, 10 analysts have recently revised their earnings estimates downward for the upcoming period.

The downgrade follows weaker-than-expected August data in Evercore’s proprietary parcel macro correlations, particularly in Industrial Production and decelerating Retail Sales. These factors prompted the firm to reduce its forward-looking EPS forecasts, with the FY2026 estimate now at $17.99, down from $19.16 previously. The stock currently trades at a P/E ratio of 13.5x, while InvestingPro’s Fair Value analysis suggests the stock may be slightly undervalued.

Evercore also highlighted additional pressure from the global removal of de minimis exemptions as of August 29 and ongoing volume challenges at FedEx Freight. While the firm believes FedEx can offset some revenue headwinds through its Network 2.0 restructuring, it noted that cost efficiencies are likely to be back-end loaded for this year.

The research firm pointed out that FedEx stock has held relatively steady over the past three months, rising 0.3% compared to a nearly 16% decline for its main competitor. Despite this resilience, Evercore sees limited relative upside potential, especially if earnings estimates continue to trend lower. The company maintains a healthy 2.57% dividend yield and has increased its dividend for four consecutive years. For deeper insights into FedEx’s financial health and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 top US stocks.

Evercore’s updated sum-of-the-parts analysis for the planned FedEx Freight split next year now indicates only 11% upside potential, with nine months remaining until execution.

In other recent news, FedEx has experienced several notable developments. UBS, Goldman Sachs, and JPMorgan have all lowered their price targets for FedEx, with UBS adjusting to $293, Goldman Sachs to $276, and JPMorgan to $285. Despite these changes, UBS and Goldman Sachs have maintained a Buy rating, while JPMorgan continues with an Overweight rating. The adjustments reflect concerns over softer volume trends, tariff uncertainties, and stagnant business-to-business demand, which could impact FedEx’s fiscal first-quarter 2026 results.

Additionally, FedEx has appointed Vishal Talwar as the new chief digital and information officer, effective August 15. Talwar, with over 27 years of experience in technology, joins from Accenture Technology. Furthermore, FedEx announced a quarterly dividend of $1.45 per share, payable on October 1, 2025, to stockholders recorded by September 8, 2025. These developments highlight the company’s strategic moves and financial commitments amid challenging market conditions.

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