FedEx

FedEx says it’s seeing improving trends in U.S. domestic parcel and international export demand. The company’s preparing to put in place additional efficiencies with its contract with the U.S. postal service is set to expires on Sept. 29, but it still expects to benefit from a moderately improving demand environment. Overall for FY25, FedEx expects low-to mid-single digit growth in revenue. In FY24, the company saw a drop in revenue of about 2.8%.Shares jump 15% to $295 in after-hours trading.

FedEx is scheduled to report earnings for the fiscal fourth quarter after the market close Tuesday. Here’s what you need to know: NET INCOME: The Memphis, Tenn.-based package-shipping company is expected to report a net profit for the three months ended May 31 of $1.33 billion, or $5.23 a share, according to FactSet. This compares with reported profit of $1.54 billion, or $6.05 a share, for the same period a year earlier. ADJUSTED EARNINGS: Stripping out one-time items, FedEx is expected to post adjusted earnings of $5.34 per share, according to FactSet. REVENUE: FedEx’s revenue is set to rise to $22.04 billion, according to FactSet. This compares with reported revenue of $21.90 billion for the same period a year earlier.

FedEx’s (FDX) fiscal fourth-quarter core earnings are likely to fall short of market expectations dragged down mainly by its express business, though the focus will be on its full-year outlook, which has “several moving parts and a wide range of expectations,” Morgan Stanley said Monday. The parcel delivery company is scheduled to report fourth-quarter results June 25. Morgan Stanley expects adjusted earnings of $5.12 a share, below Wall Street’s views for $5.32, the firm said in a note. Morgan Stanley said it’s roughly 4% below the Street’s forecast for overall earnings before interest and taxes for the quarter, led mainly by express and a “modest” miss in freight, though ground is likely to deliver a beat. The firm pegs express EBIT at $359 million, below the Street’s $435 million projection amid a “subdued” macroeconomic backdrop and a lack of material improvement in demand. “The express miss reflects demand for parcel

FedEx (FDX) is likely set to report “solid” fiscal Q4 earnings, though various headwinds are expected to dampen the impact of the parcel delivery company’s cost-cutting initiative in fiscal 2025, UBS Securities said Tuesday. Investors will likely be focused on FedEx’s full-year outlook, the firm said. “While the targeted DRIVE cost savings of [$2.2 billion] is large, we also anticipate multiple offsets including from the loss of the [United States Postal Service] contract, higher incentive compensation, lower international yields (falling airfreight prices) and two fewer operating days,” according to the note. UBS reduced its full-year EPS outlook to $21.10 from $21.72. The firm expects fiscal Q4 earnings of $5.49 a share for FedEx, topping Wall Street’s views for $5.33, with revenue growth pegged at 2%. “Within our estimate, we assume only 100 [basis points] of sequential margin improvement in Express which is conservative compared to the 10-year average of 370

Our 12-month target price remains $261, a 12x multiple of projected FY 25 (May) EPS, in line with FDX’s historical forward average. We keep our FY 24 EPS estimate at $17.78 and FY 25’s at $21.72. Our upgrade is on valuation, with shares down almost 10% since reporting FQ3 earnings in late March 2024. We think a broader macroeconomic recovery is not yet in the making, as U.S. Manufacturing PMI data continues to wobble with the April reading of 49.2, which is a downtick from March’s 50.3. In the meantime, we think FDX (like many in the Air Freight & Logistics space) is focusing on cost controls to boost margins. Shares yield 2.0%; based on our FY 25 EPS estimate, we calculate a dividend payout ratio of 23%, which we see as very manageable. We think the key inflection point to watch will be volume growth in Express, which has

FedEx’s loss of its contract with the U.S. Postal Service will likely be a roughly $1.5 billion hit to revenue, BMO Capital Markets analysts say in a research note. However, the loss of the contract will likely lead to improved margins once costs associated with the USPS deal are phased out, the analysts say. FedEx “will be able to redesign its air network schedule in a manner that removes significant cost pressures over time.” FedEx shares fall 3.1%.

Jefferies analyst Stephanie Moore maintains FedEx (NYSE:FDX) with a Hold and raises the price target from $265 to $300.

Barclays analyst Brandon Oglenski maintains FedEx with a Overweight and raises the price target from $310 to $350.

Morgan Stanley Lifts Price Target on FedEx to $210 From $195 Amid Fiscal Q3 Earnings Beat, $5 Billion Buyback Plan; Equalweight Kept。

FedEx’s fiscal third-quarter earnings report showed the shipping company is serious about getting its arms around costs, but the readout is likely to leave investors with some questions, J.P. Morgan analysts say in a research note. The analysts note that FedEx got a boost in the quarter from a smaller payout of bonuses, but that boon could turn into a challenge next year as it laps the quarter. They say FedEx is still exposed to a potential economic downturn and that management needs to show more execution on its cost-cutting program. “We expect there will be some lingering doubts when the dust settles,” the analysts say. Shares pop almost 10%.

FedEx (FDX) fiscal Q3 earnings surpassed expectations due to Express’ operating income benefiting from lower-than-expected incentive compensation accrual and effective capacity utilization in ground and freight networks to mitigate the impact of Memphis snowstorms, UBS said in a note Friday. Express is set up for significant margin improvement in fiscal 2025 as it overcomes headwinds from lower international yields and reduced postal service activity, according to the note. UBS said it expects FedEx to benefit from tailwinds due to general and administrative savings and Europe business enhancements, despite uncertainties in inflation and demand. The investment firm increased the price target on FedEx shares to $340 from $323 and reiterated its Buy rating. The company shares were up 8% in recent trading.

B of A Securities analyst Ken Hoexter maintains FedEx (NYSE:FDX) with a Buy and raises the price target from $313 to $346.