Raymond James cuts FedEx stock price target to $290

On Friday, Raymond (NSE:RYMD) James analyst Patrick Tyler Brown revised the price target for FedEx (NYSE:FDX) shares, reducing it to $290 from the previous $320. Despite this adjustment, Brown maintained an Outperform rating on the company’s stock. Currently trading at $246.21, FedEx appears undervalued according to InvestingPro analysis, with the stock trading near its 52-week low of $239.50.

In his assessment, Brown expressed confidence in FedEx’s ongoing transformation, particularly through the implementation of its DRIVE initiatives. He anticipates these changes will lead to enhanced margins, earnings, and free cash flow in the future, which may be currently underestimated by the market. The company maintains a solid financial foundation with a "FAIR" overall health score on InvestingPro, supported by a healthy current ratio of 1.23 and strong EBITDA of $10.87 billion.

Brown highlighted several strategic moves by FedEx management that he believes will contribute to improved financial returns. These include the integration of FedEx Express and Ground services under Network 2.0, a concerted effort to reduce costs through the DRIVE program, and a more rigorous approach to capital expenditure.

The analyst also pointed to FedEx’s capital return strategy, noting the introduction of a new share buyback program as a positive development for shareholders. Brown suggests that such shareholder-friendly initiatives are indicative of the company’s commitment to delivering value. InvestingPro data reveals FedEx has maintained dividend payments for 24 consecutive years, with a current yield of 2.24% and impressive dividend growth of 9.52% over the last twelve months.

Furthermore, Brown sees the planned separation of FedEx Freight into an independent entity as a significant step that could unlock additional value for the company. He expects that the spin-out will lead to increased operational scrutiny and potentially better performance within the Freight segment.

FedEx’s strategic decisions and the potential for improved financial metrics are central to Raymond James’ continued positive outlook on the stock, despite the lowered price target.

In other recent news, FedEx Corporation reported mixed results for its Q3 2025 earnings. The company’s earnings per share (EPS) came in at $4.51, which was below the forecasted $4.61, while its revenue exceeded expectations at $22.2 billion against a predicted $21.92 billion. This marked a 2% year-over-year revenue increase, the first growth seen this fiscal year. Despite achieving $600 million in cost savings through its DRIVE initiative, FedEx lowered its EPS guidance for the fiscal year to a range of $18 to $18.60, down from the previous $19 to $20.

Morgan Stanley (NYSE:MS) maintained its Underweight rating on FedEx, with a price target of $200, citing concerns about the company’s earnings pressure due to structural changes in the eCommerce sector and increased competition. The firm highlighted execution risks associated with FedEx’s transition from its DRIVE initiative to its Network 2.0 strategy. Additionally, FedEx’s management projects earnings to rise to approximately $24 by fiscal year 2026, although Morgan Stanley anticipates normalized EPS to be closer to $15.

These developments come amid a challenging economic environment, with FedEx facing a weak industrial economy and soft demand. The company remains focused on its transformation initiatives, expecting to achieve more than $4 billion in structural cost reductions by the end of FY25 compared to FY23.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.