FedEx (FDX) Stock Forecast & Price Target

FedEx has demonstrated a robust performance, with its Federal Express segment revenues increasing by 8% year-over-year, while adjusted operating income rose by 24%, evidencing the resilience of its core package delivery operations. Despite experiencing lower overall volume, international revenues benefited from stronger yields, with priority yield growth noted at 9.4% and domestic yields at 7.3%, leading to significant margin expansion to 7.7%. The company's positive trajectory is further underscored by its guidance for a 10% revenue increase for fiscal 2026 at the midpoint, reflecting continued growth potential across its segments.

FedEx's financial performance has demonstrated significant weaknesses, with adjusted operating income falling to $242 million, resulting in a margin contraction to 11.3%, which is below expectations. The company faces further challenges, including declining shipment volumes down 3.9% year-over-year, alongside a forecasted sequential decline in F3Q EPS, attributed to near-term headwinds and ongoing operational distractions from the planned spin-off. Additionally, the projected operating income headwinds of $600 million for the second half of the fiscal year, coupled with a decreasing revenue outlook for FedEx Freight, indicate a deteriorating financial environment exacerbated by waning macroeconomic tailwinds.