FedEx – upgraded forecast increases potential for share gains

FedEx exceeded profit expectations and raised its guidance for 2026, confirming the resilience of its core business. The base scenario anticipates a pullback to 340 USD, followed by a potential rebound in the share price to 480 USD.

In Q3 of the 2026 financial year, ended 28 February 2026, FedEx Corporation (NYSE: FDX) delivered a strong non-GAAP earnings report. Revenue rose to 24.0 billion USD, up from 22.2 billion USD a year earlier, while adjusted EPS increased to 5.25 USD from 4.51 USD. The adjusted operating margin dipped slightly to 6.7% from 6.8%. However, the results were still significantly ahead of market expectations, with analysts having forecast revenue of around 23.5 billion USD and EPS of 4.14 USD.

The FedEx Express segment again contributed most to the improvement. The company improved yield on both domestic and international priority shipments, increased US delivery volumes, and continued to benefit from its cost-reduction program, resulting in a rise in the segment’s adjusted operating margin to 7.9% from 7.4% the previous year. FedEx Freight was the weaker segment, with results affected by lower shipment volumes, rising labour costs, and costs related to the planned spin-off.

Following this strong quarter, FedEx raised its full-year 2026 guidance. Revenue is now expected to grow by 6.0–6.5%, compared with the previous 5–6% range, while adjusted EPS guidance has been increased to 19.30–20.10 USD, up from the prior 17.80–19.00 USD range. Management also confirmed that the planned spin-off of FedEx Freight into a separate public company remains on track for 1 June 2026.

This article reviews FedEx Corporation, detailing the company’s key revenue sources, summarising quarterly performance, and presenting expectations for the 2026 financial year. It also includes a technical analysis of FDX shares, which serves as the basis for the FedEx stock forecast for the 2026 calendar year.

About FedEx Corporation

FedEx Corporation is an American logistics company founded in 1971 by Frederick Smith. The company provides global express delivery, freight transportation, logistics, and e-commerce services. In 1978, it went public through an IPO on the NYSE, where its stock trades under the ticker FDX.

FedEx holds a leading position in the global logistics and delivery market, though its market share varies by region and delivery segment. Major competitors include Amazon Logistics, DHL, and United Parcel Service, Inc. (NYSE: UPS).

FedEx Corporation’s business model

FedEx’s business model is centred around providing logistics and transportation services, primarily express delivery and freight transportation. The company generates revenue from various business segments, each catering to different client categories: individuals, small and medium-sized enterprises, and large corporations. The main sources of the company’s income are as follows:

• FedEx Express: one of the key segments responsible for the fast delivery of parcels and documents worldwide. Revenue is generated through tariffs based on weight, distance, and delivery speed.
• FedEx Ground: ground delivery of freight and parcels, which is typically slower but more cost-effective than air transportation. This segment is popular among small and medium-sized enterprises, as well as in the e-commerce sector.
• FedEx Freight: this segment transports freight across the US and international routes, with a focus on large and heavy cargo.
• FedEx Services: provides logistics and business solutions, including supply chain management, IT services, and e-commerce support for corporations.
• FedEx Office: offers retail and business services, including document printing, mailbox rentals, and package handling and shipping at service points.

The company reports on two segments – FedEx Express and FedEx Freight – with other divisions categorised under ‘Other Income’.

FedEx Corporation Q1 2025 financial results

On 19 September 2024, FedEx reported disappointing Q1 2025 results for the quarter ended 31 August 2024. Below are the key figures compared to last year’s corresponding period:

• Revenue: 21.60 billion USD (–0.5%)
• Net income: 890 million USD (–26.0%)
• Earnings per share: 3.60 USD (–21.0%)
• Operating margin: 5.20% (–190 basis points)

Revenue by segment:

• FedEx Express: 18.30 billion USD (–1.0%)
• FedEx Freight: 2.32 billion USD (–2.0%)
• Other and eliminations: 945 million USD (+9.0%)

The fundamental analysis of FedEx’s report indicated stagnant revenue despite increased expenses. Transportation costs rose by 5% to 5.27 billion USD, and business optimisation costs increased by 22% to 128 million USD. As a result, net income declined from 1.16 billion to 0.89 billion USD. Analysts’ forecasts were not met: revenue was expected to be 360 million USD higher (21.96 billion USD), and earnings per share were projected at 4.86 USD, above the actual 3.60 USD. Following the report’s release, FedEx stock plunged by over 15%.

If the logistics company shows no revenue growth, this may indicate a slowdown in the US economy. Additional pressure came from a 0.50% interest rate cut by the Federal Reserve, which may suggest the peak of economic growth.

FedEx’s outlook for the fiscal year 2025 was cautious, with revenue expected to rise moderately and the EPS forecast lowered from 18.25–20.25 USD to 17.90–18.90 USD.

FedEx CEO Rajesh Subramaniam noted that the weak results were due to reduced demand for express deliveries, higher operating costs, and a downturn in industrial production. Despite cautious optimism about the second half of 2024, the company maintained a moderate outlook due to economic uncertainty.

FedEx Corporation Q2 2025 financial results

On 19 December 2024, FedEx reported its Q2 2025 financial results, which once again disappointed investors. Below are the main highlights:

• Revenue: 22.00 billion USD (–1.0%)
• Net income: 0.99 billion USD (–1.9%)
• Earnings per share: 4.05 USD (+1.5%)
• Operating margin: 5.60% (+10 basis points)

Revenue by segment:

• FedEx Express: 18.84 billion USD (+0.3%)
• FedEx Freight: 2.18 billion USD (–11.2%)
• Other and eliminations: 949 million USD (+0.9%)

FedEx’s management, commenting on the 1% revenue decline, attributed it to a challenging economic environment, particularly the weakness in the US industrial economy and the expiration of its air freight contract with the US Postal Service (USPS), which ended on 29 September 2024 and had previously generated approximately 2 billion USD in annual revenue. However, there were also positive developments, including a 9% increase in international export parcel volume and cost-saving benefits from the DRIVE program, which resulted in savings of 540 million USD in the last quarter.

The company also highlighted the completion of a one billion USD share buyback. It announced plans to spin off FedEx Freight into a separate publicly traded company within the next 18 months to increase stockholder value.

For Q3 of fiscal year 2025, management expects positive effects from increased DRIVE savings and higher revenue due to the Cyber Week event dedicated to cybersecurity, digital technology, and the IT industry. However, these benefits may be offset by the loss of the USPS contract.

The fiscal 2025 outlook expects revenue to remain approximately the same as last year. The EPS forecast has been adjusted to a range between 19.00 USD and 20.00 USD, down from 20.00 USD to 21.00 USD.

FedEx Corporation Q3 2025 financial results

On 20 March 2025, FedEx reported its Q3 2025 results, which again fell short of investor expectations. Below are the key figures:

• Revenue: 22.20 billion USD (+0.9%)
• Net income: 1.09 billion USD (+12.3%)
• Earnings per share: 4.51 USD (+16.8%)
• Operating margin: 6.70% (+40 basis points)

Revenue by segment:

• FedEx Express: 19.81 billion USD (+2.7%)
• FedEx Freight: 2.08 billion USD (+27.2%)
• Other and eliminations: 890 million USD (+3.3%)

In his commentary on the report, Rajesh Subramaniam noted revenue growth in Q3 compared to the same period last year, marking the first such increase in fiscal year 2025. He stated that FedEx improved profitability despite a particularly challenging operating environment, which included a busy festive season and severe weather conditions. Management also emphasised the success of the DRIVE program, which helped save 600 million USD in costs during the quarter, contributing to a 12% rise in adjusted operating income, which increased to 1.8 billion USD from the previous year.

FedEx’s management expressed cautious optimism regarding its Q4 fiscal year 2025 outlook. The company is expected to continue pursuing its revenue quality strategy and increase cost savings from the DRIVE program. Specifically, it projects closing Q4 FY2025 with annual cost savings exceeding 2.2 billion USD, in line with its target for the full fiscal year 2025.

However, management also anticipates ongoing challenges in the FedEx Freight segment, though these are expected to ease somewhat compared to previous quarters. Revenue in the FedEx Express segment is forecast to remain nearly unchanged, while the FedEx Freight segment is expected to experience a decline in revenue compared to the prior year.

FedEx revised its full fiscal year 2025 forecast downward, now expecting EPS to range from 18.00 USD to 18.60 USD, down from 19.00-20.00 USD. This revision reflects ongoing economic challenges and uncertainty regarding global trade policies under the Donald Trump administration.

FedEx Corporation Q4 2025 financial results

On 24 June 2025, FedEx released its Q4 2025 results, which this time exceeded investor expectations. Key performance indicators are as follows:

• Revenue: 22.21 billion USD (+1%)
• Net profit: 1.46 billion USD (+9%)
• Earnings per share (EPS): 6.07 USD (+12%)
• Operating margin: 8.4% (+150 basis points)

Revenue by Segment:

• FedEx Express: 18.98 billion USD (+1%)
• FedEx Freight: 2.30 billion USD (−4%)
• Other and eliminations: 946 million USD (+2%)

FedEx delivered a solid performance in Q4 FY2025, with adjusted EPS of 6.07 USD on revenue of 22.2 billion USD – both metrics exceeding expectations, despite only modest year-on-year revenue growth.

Instead of issuing full-year guidance, FedEx provided a limited outlook for Q1 FY2026, forecasting revenue growth between 0% and 2% and adjusted EPS in the range of 3.40–4.00 USD. This forecast was below analyst expectations.

There are, however, encouraging signals. The company has already achieved 2.20 billion USD in cost savings through the DRIVE program and expects a further 1.00 billion USD in FY2026, supported by both DRIVE and the Network 2.0 initiative. According to CEO Raj Subramaniam, around 200 million USD of these savings will be realised in the first quarter, with the main impact expected mid-year.

FedEx also continues to return capital generously to shareholders. The annual dividend was increased by 5% to 5.80 USD, and 2.10 billion USD remains under its share buyback program. Cash flow remains strong, with a conversion rate of nearly 90% over the past year.

A potential weakness is management’s decision not to provide full-year guidance, which underlines the ongoing external uncertainty – particularly concerning trade tariffs between the US, China, and Europe. Additional pressure comes from reduced freight volumes from Asia to the US, the expiration of the USPS contract, and continued weakness in the B2B segment. However, FedEx is actively shifting its focus to higher-margin, oversized shipments. It has signed a new rural delivery agreement with Amazon, which may help offset some of the pressure on revenue.

The Q4 FY2025 report demonstrated the company’s resilience in an unstable global environment, with effective cost control adding to investor confidence. In addition, shareholders continue to receive generous payouts. However, the cautious outlook and global risks offer little room for short-term optimism.

For long-term investors, the key question remains whether FedEx can successfully translate its structural reforms and network improvements into profit growth by mid-FY2026. If so, the current share price may represent an attractive entry point.

FedEx Corporation Q1 2026 financial results

On 18 September 2025, FedEx published its Q1 2026 results for the quarter ended 31 August 2025. The key figures are as follows:

• Revenue: 22.24 billion USD (+3% year-on-year)
• Net profit: 0.91 billion USD (+2% year-on-year)
• Earnings per share: 3.83 USD (+6% year-on-year)
• Operating margin: 5.8% (+20 basis points)

Revenue by segment:

• FedEx Express: 19.12 billion USD (+4% year-on-year)
• FedEx Freight: 2.26 billion USD (–3% year-on-year)
• Other and eliminations: 871 million USD (+60% year-on-year)

FedEx delivered Q1 2026 results that exceeded expectations. Revenue reached 22.2 billion USD (+3% year-on-year), adjusted EPS was 3.83 USD (+6% year-on-year), and the non-GAAP operating margin expanded to 5.8% (+20 bps). Consensus had forecast around 21.66 billion USD in revenue and 3.68 USD in EPS.

Among the negative factors in the quarter were trade barriers and tariffs: the removal of the de minimis regime (duty-free import of low-value goods) reduced quarterly revenue by 150 million USD and, according to FedEx, could cost up to around 1 billion USD for the full year. International export volumes fell 3%, while rising wages and transport costs, the expiry of the USPS contract, and a one-off tax expense of 16 million USD further weighed on performance. The FedEx Freight segment also posted weaker operating results.

On the positive side, the domestic US market remained resilient, with average daily parcel volume rising 4% and revenue per parcel increasing 2%. The effects of the ongoing cost-saving program (target: 1 billion USD) supported margins. The company also repurchased 0.5 billion USD worth of shares and ended the quarter with 6.2 billion USD in cash. Additionally, it announced an average tariff increase of 5.9% effective from 5 January 2026 and confirmed the planned spin-off of FedEx Freight into a standalone public company by June 2026.

Management forecasts FY2026 revenue growth of 4–6% and adjusted EPS in the range of 17.20–19.00 USD. Planned targets include capital expenditure of approximately 4.5 billion USD, an effective tax rate of around 25%, and delivery of 1 billion USD in structural cost savings. No quarterly guidance was issued for Q2, but the company expects a moderately strong peak season, characterised by a slight increase in average daily peak volumes and growth in total peak traffic, implying a sequential improvement in Q2 compared to Q1, while risks from international trade remain.

FedEx Corporation Q2 2026 financial results

On 18 December 2025, FedEx presented its Q2 2026 results for the quarter ended 30 November 2025. Below are the key figures:

• Revenue: 22.47 billion USD (+3%)
• Net profit: 1.14 billion USD (+15%)
• Earnings per share: 4.82 USD (+19%)
• Operating margin: 6.9% (+60 basis points)

Revenue by Segment:

• FedEx Express: 20.43 billion USD (+8%)
• FedEx Freight: 2.14 billion USD (–2%)
• Other and eliminations: 897 million USD (–5%)

In Q2 2026 of the fiscal year (ended 30 November 2025), FedEx delivered strong non-GAAP results: revenue amounted to 23.5 billion USD (+7% y/y), net profit – 1.14 billion USD (+15% y/y), earnings per share – 4.82 USD (+19% y/y), and the operating margin rose to 6.9% from 6.3% a year earlier. The company exceeded analysts’ expectations: the market expected EPS of around 4.12 USD and revenue of 22.8 billion USD.

The main growth came from FedEx Express, where both volumes and tariffs increased – average daily parcel volume rose by 5%, and revenue per delivery also improved. As a result, the segment’s operating profit grew significantly, and the margin rose to 7.6% versus 5.6% a year earlier.

The weak spot in the quarter was FedEx Freight, where revenue slightly declined and the margin dropped to 4.2% (compared with 14.3% a year ago) due to one-off expenses related to spin-off preparation (around 152 million USD). Without these costs, the Freight results would have looked stronger.

Management upgraded the full-year 2026 fiscal forecast. The company expected revenue to grow by 5–6% and earnings per share of 17.80–19.00 USD. FedEx also reaffirmed its cost reduction plan of 1 billion USD and capital expenditure of 4.5 billion USD.

FedEx Corporation Q3 2026 financial results

On 19 March 2026, FedEx released its Q3 2026 financial results for the quarter ended 28 February 2026. The key figures are as follows:

• Revenue: 24.00 billion USD (+8%)
• Net income: 1.26 billion USD (+15%)
• Earnings per share: 5.25 USD (+16%)
• Operating margin: 6.7% (–10 basis points)

Revenue by Segment:

• FedEx Express: 21.15 billion USD (+10%)
• FedEx Freight: 1.99 billion USD (–5%)
• Other and eliminations: 855 million USD (–4%)

For Q3 2026, FedEx once again delivered a strong non-GAAP performance. Revenue increased 8% year-on-year, net income rose 16%, and adjusted operating profit reached 1.62 billion USD, up from 1.51 billion USD a year earlier. Although adjusted operating margin edged down slightly to 6.7% from 6.8%, the market responded positively, as FedEx significantly exceeded analyst expectations: consensus estimates were around 23.5 billion USD in revenue and 4.14–4.15 USD in EPS.

The primary driver of the quarter was once again Federal Express. Growth was supported by improved yield in US domestic and International Priority services, as well as higher domestic parcel volumes in the US, resulting in an overall domestic package yield increase of 5%.

FedEx Freight remained the weakest part of the quarter. Segment revenue declined by 5%, GAAP operating profit fell to almost break-even at just 8 million USD, compared with 261 million USD a year earlier, and the margin dropped to 0.4% from 12.5%. The segment remains under pressure due to weak demand, lower shipment volumes, and rising labour costs.

Management upgraded its outlook for the full 2026 financial year. FedEx now expects revenue growth of 6.0–6.5%, up from the previous 5–6% range; adjusted EPS of 19.30–20.10 USD, compared with 17.80–19.00 USD previously; ongoing cost reductions of more than 1 billion USD; and capital expenditure not exceeding 4.1 billion USD, reduced from the prior 4.5 billion USD guidance.

Overall, the report appears strong. FedEx’s core business is currently demonstrating solid growth in both volume and pricing, while the main drag remains the temporary weakness in Freight and costs related to its planned spin-off.

Analysis of key FedEx Corporation valuation multiples

Below are the key FedEx Corporation valuation multiples based on Q3 of the 2026 financial year, calculated at a share price of 358 USD.

FDX valuation multiples – conclusion:

Based on valuation multiples, FedEx currently appears more fairly valued than cheap. Key strengths include a low P/S ratio, an acceptable free cash flow yield, and manageable debt levels. This indicates that cash flow remains sufficient to support the current valuation. However, in terms of earnings and operational efficiency, the picture is less comfortable. A P/E of around 19, EV/EBITDA of approximately 10, and particularly EV/EBIT near 18 imply that the market already expects the company to maintain stable margins and deliver further benefits from its transformation program.

Overall, FedEx appears to be a high-quality, cyclical business at a moderate price, without a significant discount. Near-term upside over the next 6–12 months will primarily depend on whether the company can sustain its margins, continue cost savings, and deliver on its adjusted EPS guidance. If it does, the valuation looks attractive as a buying opportunity. If not, the stock could remain under pressure, as current multiples leave little margin for error.

Expert forecasts for FedEx Corporation stock

• Barchart: 16 out of 27 analysts rated FedEx shares as Strong Buy, 2 as Moderate Buy, 8 as Hold, and 1 as Sell. The upper price target is 479 USD, and the lower target is 217 USD.
• MarketBeat: 18 out of 29 analysts assigned a Buy rating, 10 recommended Hold, and 1 recommended Sell. The upper price target is 479 USD, and the lower target is 230 USD.
• TipRanks: 16 out of 23 analysts rated the shares as Buy, 6 as Hold, and 1 as Sell. The upper price target is 479 USD, and the lower target is 230 USD.
• Stock Analysis: 8 out of 20 experts rated FedEx shares as Strong Buy, 6 as Buy, 5 as Hold, and 1 as Sell. The upper price target is 455 USD, and the lower target is 230 USD.

FedEx Corporation stock price forecast for 2026

On the weekly chart, FedEx shares broke above the upper boundary of an ascending channel in February 2026 and held above it, indicating potential for further gains roughly equivalent to the channel width – up to around 480 USD. However, the Stochastic indicator is already in overbought territory, suggesting either a short-term correction or a period of consolidation before the next upward move. Based on the current price dynamics of FedEx shares, the potential scenarios for 2026 are as follows:

The primary FedEx stock forecast anticipates a pullback to the channel support at 340 USD, followed by a rebound that could drive the stock towards the main target of 480 USD.

The alternative forecast for FedEx shares assumes a deterioration in the company’s financial performance amid a weakening US macroeconomic environment. In this scenario, FDX shares could break below the 340 USD channel support, which would act as a catalyst for a further decline towards 240 USD.

Risks of investing in FedEx Corp stock

When investing in FedEx, it is essential to consider the risks the company may face. Below are the key factors that could negatively impact FedEx’s revenue:

• Economic sensitivity: FedEx’s financial performance is closely tied to the global economy. Economic downturns may reduce demand for shipping services as businesses and consumers cut back on spending.
• Intense competition: the logistics sector is highly competitive. FedEx faces significant pressure from major players such as UPS (NYSE: UPS) and DHL, as well as emerging competitors like Amazon (NASDAQ: AMZN), which is developing its own logistics network.
• Fuel price volatility: as a logistics company, FedEx is heavily dependent on fuel prices. While fuel surcharges help offset costs, continuous price increases can raise shipment costs and lead to customer dissatisfaction due to higher tariffs, ultimately impacting revenue.
• Dependence on the US market: a substantial portion of FedEx’s revenue is derived from the US. Economic challenges or market saturation within the US may limit growth opportunities and reduce overall revenue.

Open Account