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Investing.com - JPMorgan has reduced its price target on FedEx (NYSE:FDX) to $285 from $290 while maintaining an Overweight rating ahead of the company’s September 18 earnings report. With a current market capitalization of $53 billion and a P/E ratio of 13.2x, InvestingPro analysis suggests the stock is currently undervalued.
The investment bank expects downside risk to FedEx’s fiscal first-quarter 2026 results, citing stagnant business-to-business demand, deteriorating business-to-consumer trends, and increasing tariff pressures. These factors could create a lower base to start the year and trigger negative earnings revisions. Despite these challenges, FedEx maintains a GOOD financial health score, with analysts projecting EPS of $18.73 for fiscal year 2026.
JPMorgan notes that the early removal of non-China de minimis exemptions won’t impact the first quarter but puts incremental revenue at risk, suggesting the expected $170 million tariff headwind to operating income could worsen throughout the year.
The firm anticipates management will address several key topics during the earnings call, including the competitive landscape, the Amazon big-and-bulky contract ramp-up, Network 2.0 integration progress, and peak season expectations.
Despite near-term challenges, JPMorgan maintains its long-term Overweight view on FedEx, finding the stock attractive on a discounted sum-of-the-parts basis, supported by the planned Freight spin-off and Network 2.0 integration benefits.
In other recent news, FedEx Corporation announced a quarterly cash dividend of $1.45 per share, set to be paid on October 1, 2025, to shareholders recorded by September 8, 2025. UBS adjusted its price target for FedEx to $293 from $297 while maintaining a Buy rating, citing a modest slowdown in volume growth affecting its Ground division and Domestic Express services. In leadership changes, FedEx appointed Vishal Talwar as the new chief digital and information officer, effective August 15, following the departure of Sriram Krishnasamy from the same role. Krishnasamy will remain with the company as an Executive Advisor until October 31, 2025. Additionally, FedEx has resumed its services to and from Israel after previously suspending operations due to regional flight safety risks. The company introduced a surcharge for these resumed services. These developments reflect FedEx’s ongoing operational and strategic adjustments in response to market and regional challenges.
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