FedEx Stock (FDX) Threatening Breakout Ahead of Earnings

FedEx stock (NYSE:FDX) is trading at $283.73 into earnings, up 0.5% on the day. The stock has rallied more than 40% off the lows, and shows signs of a potential breakout, having crossed through the $280 level.

Wall Street is expecting the company to put up an EPS of $4.11 on revenue of $22.8 billion for the quarter. This would represent a very slight improvement on the $4.05 EPS this time last year, and a 3.78% revenue growth Y/Y.

Leading up to this earnings release, FedEx has been active on several fronts. The most significant development was the announcement of the FedEx Freight division spin-off, slated to occur within 18 months of the December 2024 announcement. This strategic move aims to unlock shareholder value by allowing both the core FedEx business and the Freight division to operate with greater independence and focus.

The Freight division alone generated $9.4 billion in revenue in Fiscal 2024, underscoring its importance. The initial market reaction was positive, with FDX stock gaining approximately 9% in after-hours trading following the announcement.

Furthermore, FedEx has been actively pursuing strategic collaborations. The expanded partnership with ServiceNow, announced in October, aims to integrate AI, data, and workflows to enhance future supply chains. This multi-year initiative aims to leverage FedEx's shipment and route performance data with ServiceNow's AI platform to anticipate potential disruptions, optimize networks, and expedite procurement decisions. Initial capabilities are expected to debut in the first quarter of 2026.

Adding to shareholder value, FedEx declared a quarterly dividend of $1.45 per share, payable on January 6, 2026, to shareholders of record as of December 15, 2025. This translates to an annualized dividend of $5.80, yielding approximately 2.1%. This consistent dividend payout reflects FedEx's commitment to returning capital to its investors.

Analyst sentiment surrounding FedEx remains mixed but generally constructive. Stifel  recently raised its target price from $296.00 to $297.00, maintaining a “buy” rating. However, JPMorgan downgraded FedEx from “buy” to “hold,” citing challenges in the Freight business due to soft demand and overcapacity. Conversely, Wells Fargo & Company increased its target price from $250.00 to $280.00, assigning an “equal weight” rating. The consensus price target stands at $285.67, suggesting a slight potential increase from the current trading price. Deutsche Bank is even more bullish, recently raising its price target for FedEx to $322.00.

The potential breakout hinges on the company's ability to deliver results, and a guide that impresses the street. Any significant miss on earnings or revenue could trigger a sell-off, potentially driving the stock back towards its 50-day SMA.