FedEx stock price target raised to $244 by BofA on strong earnings

Investing.com - BofA Securities raised its price target on FedEx (NYSE:FDX) to $244.00 from $240.00 while maintaining a Neutral rating following the company’s first-quarter fiscal 2026 results. According to InvestingPro data, FedEx currently trades at $226.50 with a P/E ratio of 13.44x, suggesting potential upside based on analyst targets ranging from $200 to $320.

FedEx shares rose 5% in after-hours trading after reporting quarterly earnings per share that exceeded both BofA’s and Wall Street’s expectations by 8% and 7%, respectively. The company, with a market capitalization of $53.44 billion and annual revenue of $88.59 billion, maintains a "GOOD" overall financial health score according to InvestingPro analysis.

The company provided an adjusted EPS target range of $17.20-$19.00 for fiscal 2026, which implies a slight year-over-year decline despite projected revenue growth of 4% to 6%. Notably, FedEx has maintained dividend payments for 24 consecutive years and has raised its dividend for 4 straight years, with a current yield of 2.56%. For more detailed analysis and additional insights, check out the comprehensive Pro Research Report available on InvestingPro.

BofA noted that FedEx faces approximately $1 billion in operating income headwinds from global trade impacts, including lost de minimis, shifting volumes, and $300 million in customs clearance costs, plus an additional $160 million impact from the USPS contract expiration in September.

These challenges are expected to be partially offset by $1 billion in transformation cost savings, while the company’s business mix will shift as higher-margin Express International business losses are compensated by Domestic share gains, including Amazon volume increases that are described as profitable but with lower margins.

In other recent news, FedEx reported its fiscal first quarter 2026 results, which exceeded expectations. The company announced adjusted earnings per share of $3.83, surpassing both its guidance range of $3.40-$4.00 and analyst expectations of $3.61. Additionally, FedEx’s revenue came in at $22.2 billion, beating the anticipated $21.69 billion. Despite these positive results, Stifel lowered its price target for FedEx to $296 from $308, citing economic uncertainty, though it maintained a Buy rating on the stock. These developments highlight the mixed sentiment surrounding FedEx, with strong financial performance countered by cautious analyst adjustments.

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