UBS lowers FedEx stock price target to $293 on softer volume trends

Investing.com - UBS has lowered its price target on FedEx (NYSE:FDX) to $293.00 from $297.00 while maintaining a Buy rating on the stock. The prominent player in Air Freight & Logistics, with a market capitalization of $54.65 billion and a healthy 2.5% dividend yield, currently trades at a P/E ratio of 13.7x. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value metrics.

The adjustment comes after FedEx management reported a modest slowdown in volume growth in mid-July affecting its business-to-consumer package operations, primarily in the Ground division but also impacting Domestic Express services.

FedEx also indicated worse-than-expected less-than-truckload (LTL) shipment performance in the first quarter of fiscal year 2026.

UBS expects FedEx to respond to the softer volume trends with additional cost reduction measures, though the firm acknowledges implementation delays are likely.

The investment bank has reduced its first-quarter earnings per share estimate for FedEx from $3.70 to $3.57, compared to the consensus estimate of $3.71 per share.

In other recent news, FedEx announced its fourth-quarter adjusted earnings per share of $6.07, surpassing the consensus estimate of $5.81. Despite this positive earnings result, UBS lowered its price target for FedEx to $297 from $311, citing visibility concerns, though it maintained a Buy rating on the company’s shares. Additionally, FedEx declared a quarterly cash dividend of $1.45 per share, payable on October 1, 2025, to shareholders of record as of September 8, 2025.

In leadership changes, FedEx appointed Vishal Talwar as its new executive vice president, chief digital and information officer, and president of FedEx Dataworks, effective August 15. Talwar joins the company with over 27 years of experience in technology. This appointment follows the departure of Sriram Krishnasamy, who stepped down from his roles as executive vice president, chief digital and information officer, and chief transformation officer. Krishnasamy will remain with FedEx as an executive advisor until October 31, 2025.

Furthermore, FedEx has resumed its services to and from Israel after suspending operations due to regional flight safety risks. The company had previously halted its services following missile exchanges in the Middle East.

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