EU and US could reach trade deal this weekend - Reuters
Investing.com - Evercore ISI lowered its price target on FedEx (NYSE:FDX) to $249.00 from $259.00 on Wednesday, while maintaining an Outperform rating on the stock. The prominent player in the Air Freight & Logistics industry, with a market capitalization of $52 billion and trailing twelve-month revenue of $87.8 billion, is currently trading at a P/E ratio of 14.2x. According to InvestingPro analysis, the stock appears slightly undervalued at current levels.
The research firm cited FedEx’s first-quarter fiscal 2026 earnings guidance of $3.40-4.00 per share, which falls below the previous Street forecast of $4.05 and Evercore’s estimate of $4.34. This guidance revision aligns with InvestingPro data showing 13 analysts have recently revised their earnings estimates downward. FedEx identified ongoing trade headwinds and tariff-related uncertainty as key factors affecting its outlook.
The delivery giant projects tariffs will have a net impact of $170 million for the first quarter of fiscal 2026. The company also faces a $120 million headwind related to the loss of the U.S. Postal Service contract, which represents the last difficult comparison related to this specific challenge.
Evercore expects FedEx’s first-quarter earnings to represent less than 20% of its fiscal 2026 total, compared to a long-term average of 22%. The firm reduced its fiscal 2026 earnings per share forecast to $19.16 from $19.95.
The research firm noted that despite the disappointing first-quarter outlook, FedEx’s path forward should differ from historical seasonal trends as the specific challenges to this quarter abate, barring a full-blown trade war. The company maintains a "GOOD" overall Financial Health score, with a solid dividend yield of 2.53%. For deeper insights into FedEx’s financial health and extensive analysis, investors can access the comprehensive Pro Research Report available on InvestingPro.
In other recent news, FedEx Corporation reported stronger-than-expected earnings for the fourth quarter of fiscal year 2025. The company announced earnings per share (EPS) of $6.07, surpassing the forecasted $5.96, and reported revenue of $22.2 billion, exceeding expectations by 1.65%. Despite these positive results, FedEx has decided to withhold its full-year earnings outlook for fiscal 2026, a departure from its usual practice. JPMorgan has maintained its Overweight rating on FedEx, with a price target of $290.00, even as the company’s guidance for the first quarter of fiscal 2026 came in below consensus. FedEx is also preparing for a significant FedEx Freight spin-off planned for June 2026. Additionally, the company is targeting $1 billion in transformation-related savings and a $2 billion savings opportunity through its Network 2.0 initiative. These developments highlight FedEx’s strategic efforts to navigate a challenging global trade environment and enhance operational efficiency.
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