FedEx (FDX) Stock Forecast & Price Target

FedEx remains the world's largest express package provider, with its Federal Express segment accounting for 86% of total revenue in fiscal 2025, demonstrating a robust core business foundation. The company has achieved significant cost savings of approximately $4 billion through its DRIVE initiative from FY23 to FY25, highlighting its commitment to operational efficiency and margin improvement. Management’s upward revision of earnings expectations and projections for sequential improvements in margins reflect a favorable outlook driven by positive pricing trends and ongoing strategic integrations.

FedEx's financial performance has shown signs of decline, with an operating ratio deterioration of 40 basis points year-over-year to 79.2%, aligned with a 4% decrease in revenue and a 1% drop in adjusted shipments. Additionally, the company's EBIT fell by 6%, compounded by challenges from waning macroeconomic tailwinds, particularly due to shifts in trade policies that are affecting shipper behavior. Significant headwinds, such as the revocation of the de minimis exemption for Chinese imports and increased tariffs, are anticipated to persist, further complicating FedEx’s revenue and margin outlook in the near term.