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Investing.com - Evercore ISI lowered its price target on FedEx (NYSE:FDX) to $259.00 from $276.00 while maintaining an Outperform rating, citing macroeconomic challenges ahead of the company's earnings release Tuesday. The logistics giant, currently trading at $226.04 with a market cap of $54.16 billion, is showing signs of being slightly undervalued according to InvestingPro Fair Value metrics.
The firm reduced its fourth-quarter earnings estimate to $5.88 per share from $6.14 previously, pointing to deceleration in retail sales growth and significant weakening in industrial production. Evercore's fiscal 2026 forecast was also cut to $19.95 from $21.22 per share. InvestingPro data reveals that 9 analysts have recently revised their earnings estimates downward, while the company maintains a solid P/E ratio of 14.01.
Macro (BCBA:BMAm) correlation analysis conducted by Evercore showed end-of-quarter softening, with May data particularly weak for both retail sales and industrial production. China export trends remain unclear, with China-to-U.S. trade declining by 21% in April and 34.5% in May.
The firm noted that tariff uncertainty created "shipper uncertainty and often paralysis" during the quarter, contributing to the challenging operating environment for FedEx. The price target reduction also reflects share-price weakness in FedEx's closest competitors.
Evercore indicated that FedEx's fiscal 2026 guidance range will be the most closely watched element of the earnings release, though it suggested the company might opt not to provide full-year guidance given the uncertain macro backdrop, or potentially shift to quarterly guidance only.
In other recent news, FedEx Corp announced a 5% increase in its annual dividend, raising it to $5.80 per share for fiscal year 2026. This marks the fifth consecutive year of dividend growth for the company, reflecting its strategy to enhance stockholder value. Analysts have been adjusting their outlooks for FedEx, with Stephens lowering its price target to $280, citing macroeconomic challenges impacting the company's parcel and less-than-truckload (LTL) businesses. Meanwhile, Bernstein reduced its price target to $249, expressing concerns about the company's initiatives and fiscal 2026 earnings estimates. Wolfe Research also cut its price target to $253, ahead of FedEx's upcoming fourth-quarter fiscal report, while maintaining an Outperform rating. Despite these adjustments, Wolfe Research raised its fiscal 2026 earnings per share estimate by 3% to $18.50, although this remains below consensus. Additionally, FedEx founder Frederick Smith has passed away, as announced by the company's current CEO, Raj Subramaniam.
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