FedEx (FDX) Stock Forecast & Price Target

FedEx experienced robust growth in its Federal Express segment, which accounts for 86% of total revenue, achieving an 8% year-over-year revenue increase and a remarkable 48.7% rise in EBIT. The company reported an expansion in margins to 7.7% for the quarter, driven by strong domestic yields, particularly in priority shipping, which increased by 6%. Overall, these positive financial developments support FedEx's guidance for a 10% revenue increase in fiscal 2026 at the midpoint.

FedEx reported adjusted operating income of $242 million, which fell significantly below expectations and resulted in a margin contraction of 300 basis points to 11.3%, considerably under both internal and market forecasts. The company is anticipating sequentially lower earnings per share in fiscal Q3 due to lower shipment volumes, which declined by 3.9% year-over-year, and ongoing operational challenges related to its planned spin-off. Additionally, macroeconomic headwinds, including a soft industrial environment and potential impacts from changing trade policies, are expected to further pressure the company, with guidance indicating significant operating income headwinds in the second half.