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Fedex Earnings on Deck – Analysts Trim Expectations Leading In

Asktraders News Team trader
Updated 24 Jun 2025

FedEx Corporation (NYSE: FDX) heads into its fourth-quarter fiscal 2025 earnings report today, after market close in bearish mood, with it's stock down 16.4% since the start of the year. The shipping giant finds itself at a crossroads, navigating a complex landscape of softening international demand, revised financial forecasts, ambitious cost-cutting initiatives, and sadly, the passing of it's founder Fred Smith.

The prevailing sentiment among analysts suggests a cautious outlook. UBS, for instance, recently lowered its EPS estimate for the quarter to $5.80, a significant drop from its previous forecast of $6.22 and below the consensus estimate of $6.01.

Stifel has also lowered their price target on FDX leading into the print this morning, with a new $329 mark some $25 lower than previously targeted. The firm does however maintain a Buy rating on the stock, with the transformation expected to be front of mind for markets in addition to the outlook.

UBS' revision was primarily driven by weaker international demand and macroeconomic volatility impacting FedEx's global operations.

Consequently, UBS has also adjusted its fiscal 2026 EPS estimate downward to $19 from $20.41 and reduced its price target for FedEx stock to $311 from $331, despite maintaining a ‘Buy' rating. This suggests that while UBS remains optimistic about FedEx's long-term prospects, they acknowledge the near-term challenges the company faces.

Adding to the complexity, FedEx itself has revised its fiscal 2025 revenue and earnings forecasts. The company now anticipates revenue to be flat to slightly down year-over-year, a more conservative outlook compared to the previously projected flat growth.

Similarly, diluted EPS is now expected to range between $15.15 and $15.75 before mark-to-market retirement plan adjustments, down from the prior forecast of $16.45 to $17.45 per share. Adjusted EPS, excluding costs related to business optimization initiatives, is projected to be between $18.00 and $18.60 per share, a decrease from the earlier forecast of $19.00 to $20.00 per share.

In response to these challenges, FedEx has embarked on a series of cost-cutting measures under its DRIVE transformation program. The company aims to reduce costs by $2.2 billion through this initiative, focusing on enhancing operational efficiency and improving margins.

Furthermore, FedEx is pursuing a complete separation of its FedEx Freight segment, with plans to create a new publicly traded company. This strategic move, expected to be tax-free for U.S. federal income tax purposes and completed by June 2026, is intended to unlock value and allow FedEx to focus on its core express and ground delivery services.

The print will be scrutinised for the shape of the transformation, and the outlook moving forward. With the passing of Fred Smith, the Board at Fedex has been reduced to twelve members; electing R. Brad Martin, who previously served as Vice Chairman of the Board, as Chairman of the Board effective June 23, 2025.

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