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Based in Memphis, Tennessee, FedEx Corporation (FDX) is a global express delivery service provider that provides transportation, e-commerce, and business-related services. Valued at a market cap of $72.4 billion, the company operates through FedEx Express; FedEx Ground; FedEx Freight; and FedEx Services segments.
Shares of this freight and logistics company have underperformed the broader market over the past 52 weeks. FDX has gained 13.6% over this time frame, while the broader S&P 500 Index ($SPX) has rallied almost 27%. In 2024, shares of FDX gained 16.3%, closely matching SPX’s 16.8% return on a YTD basis.
However, zooming in further, FDX has outpaced the Proshares Supply Chain Logistics ETF’s (SUPL) nearly 4% gain over the past 52 weeks and a marginal increase on a YTD basis.
FedEx’s underperformance relative to the SPX is primarily driven by a challenging macroeconomic environment and oversupply in the industry, leading to pricing pressure, decreased margins, and weak delivery volumes. However, the stock surged 15.5% following its better-than-expected Q4 earnings release on Jun. 25, beating analyst estimates for revenue and profits. This was attributed to a 16% year-over-year decline in capital spending and the company’s slight increase in operating margin, benefiting from its DRIVE transformation program to cut costs and consolidate the business. The company’s positive growth outlook for the fiscal year 2025 further boosted investor confidence.
For the current fiscal year, ending in May 2025, analysts expect FDX’s EPS to grow 17.6% year over year to $20.94. The company’s earnings surprise history is mixed. It beat the consensus estimates in three of the last four quarters while missing on one another occasion.
Among the 26 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on 16 “Strong Buy” ratings, two “Moderate Buys,” seven “Holds,” and one “Strong Sell.”
The configuration is more bullish than three months ago, with 14 analysts suggesting a “Strong Buy.”
On Aug. 16, Thomas Wadewitz from UBS maintained a “Buy” rating on FedEx with a price target set at $333.
The mean price target of $322.40 represents a premium of only 9.6% to FDX’s current levels. The street-high price target of $360, implies a potential upside of 22.3% from the current price.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
