Key Points:

1. FedEx is scheduled to report its fiscal Q4 2025 earnings after the U.S. market closes on June 24. Analysts forecast revenue of $21.81

billion and adjusted earnings per share of $5.91.

2. Wall Street analysts generally maintain a bullish stance on FedEx stock, with most assigning a “Buy” or equivalent rating. However, the

interplay of tariffs and geopolitical risks has recently increased the business risks facing FedEx.

Global logistics giant FedEx (FDX) is set to release its fiscal Q4 2025 earnings report after the U.S. market closes on June 24. Wall Street

analysts broadly expect a slight decline in revenue, while earnings are projected to post modest growth.

At present, investor sentiment across Wall Street remains cautiously optimistic. Most analysts are positive on the global logistics leader,

though some firms have recently lowered their price targets and earnings estimates for the stock. Escalating tensions in the Middle East,

tariff uncertainty, and broader macroeconomic pressures are all casting a shadow over FedEx’s near-term outlook.

Street Expectations

Wall Street analysts project that FedEx will report fiscal Q4 revenue of approximately $21.81 billion, down 1% from $22.1 billion in Q4 of fiscal

2024. This aligns with the mild revenue contraction seen in fiscal Q3 2025, when revenue rose 1.94% year-over-year to $22.16 billion.

Driven by cost-cutting measures under its DRIVE initiative, analysts expect adjusted earnings per share (EPS) to come in at $5.91,

representing an 8% increase from $5.41 in the same quarter last year. This suggests that the company’s ongoing focus on cost discipline is

beginning to bear fruit.

The DRIVE program aims to deliver $2.2 billion in permanent cost reductions by fiscal 2025 and has been a key highlight for investors. The

company reported $600 million in savings from the initiative in Q3. However, declining demand for express delivery services, a growing

reliance on deferred (slower and lower-cost) services, and the loss of the U.S. Postal Service air cargo contract to UPS in September 2024

have all weighed on profitability.

Source: FedEx

That said, FedEx has lowered its full-year fiscal 2025 guidance for the third straight quarter. The company now expects adjusted EPS of

$18.00 to $18.60—down from the prior range of $19.00 to $20.00. Revenue is projected to be flat or slightly down year-over-year, compared

to a previously expected flat performance. Capital expenditures are forecast at $4.9 billion, down from the prior estimate of $5.2 billion, with

a continued focus on network optimization and fleet modernization.

Analyst Sentiment

Wall Street analysts remain broadly bullish on FedEx stock, with the majority maintaining a “Buy” or equivalent rating. According to a broader

consensus tracked by The Wall Street Journal covering 35 analysts, 20 have issued a “Buy” rating, while 10 rate the stock as “Hold.” The

average price target stands at $273.34, implying a potential upside of 20.92% from the current share price of $226.04. However, despite the

generally positive sentiment, recent downward adjustments to price targets suggest a note of caution among investors.

UBS lowered its price target on FedEx from $331 to $311, citing slower volume and revenue growth across both FedEx Express and FedEx

Freight segments, as well as decelerating margin expansion in fiscal 2026.

Morgan Stanley maintained its “Underweight” rating with a $200 price target, warning that Q4 earnings could be “meaningfully below

expectations” due to inflationary pressures, one fewer operating day, tariff-related volume headwinds, and soft business-to-business (B2B)

demand. The firm emphasized that the fiscal 2026 outlook could overshadow Q4 performance.

Bernstein cut its price target from $282 to $249, voicing concerns about FedEx’s ability to effectively align its DRIVE cost-savings plan with

the upcoming Network 2.0 integration—potentially jeopardizing earnings expectations for fiscal 2026.

This cautious optimism reflects confidence in FedEx’s core strengths, cost-reduction initiatives, and anticipated value creation from the

spin-off of its freight business. Still, analysts remain wary of near-term challenges including stagnant demand, pricing uncertainty, and

operational risks tied to network integration. The stock’s 20% year-to-date decline—underperforming the broader market—underscores

these concerns.

Source: TradingView

Downside Risks

The Trump administration’s reciprocal tariff policy—particularly the new duties on steel-made appliances (set to reach as high as 50%

beginning June 23, 2025), along with potential additional tariffs on Chinese goods—could pose a risk to FedEx’s fiscal 2026 performance.

Analysts at UBS and Morgan Stanley have emphasized that tariffs may reduce trade volumes, disrupt shipping lanes, and dampen B2B

demand, especially within the Express and Freight segments.

FedEx CFO John Dietrich noted in the third-quarter report that the “ongoing weakness and uncertainty in the U.S. industrial economy”

continues to weigh on B2B services, a trend that tariffs could further intensify.

The threat of tariffs—alongside potential retaliatory actions from trading partners such as China—could further compress shipping volumes.

Morgan Stanley’s bearish outlook underscores that guidance for fiscal 2026 will be critical, as tariff-related headwinds in the near term may

outweigh the benefits of cost-saving measures.

Compounding these risks is the escalation of geopolitical tensions in the Middle East. Since June 13, 2025, military conflict between Israel

and Iran has intensified. On June 21, the United States launched airstrikes on three Iranian nuclear enrichment facilities, further heightening

regional instability. These developments have pushed Brent crude oil prices up by 10%, now hovering around $78 per barrel. Rising fuel

costs may squeeze FedEx’s margins, particularly as transportation expenses rose 5% year-over-year to $5.27 billion in the fiscal third

quarter.

The intersection of tariff and geopolitical risks is creating a volatile operating environment. While FedEx’s global network remains a core

strength, it also exposes the company to fluctuations in international trade and fuel markets. How effectively the company can adapt through

operational agility and disciplined cost management will be key going forward.

What's Next

Despite short-term challenges, FedEx’s strategic initiatives offer reasons for optimism.

First, the company’s DRIVE program—which targets $2.2 billion in permanent cost savings—is progressing as planned, with notable

improvements in network optimization and fleet modernization. Fiscal Q3 2025 results showed a 12% year-over-year increase in adjusted

operating income, underscoring the program’s effectiveness.

FedEx Freight is scheduled to be spun off in June 2026, a move expected to unlock $10 billion to $20 billion in incremental equity value. The

separation will allow FedEx to sharpen its focus on Express and Ground operations, while enhancing Freight’s competitive positioning.

Analysts at BofA Securities raised their price target to $347, citing the spin-off’s potential for value creation.

In addition, FedEx is well-positioned to capitalize on the continued growth of e-commerce, particularly in emerging markets. By 2030,

investments in artificial intelligence, automation, and drone technology are expected to improve delivery efficiency and lower costs.

FedEx currently trades at a price-to-earnings ratio of 15.31 and offers a dividend yield of 2.26% (an annualized payout of $5.52), providing

value and stability for long-term investors. Analysts forecast an annual EPS growth rate of 11.7% through 2026, with a price target of

$268.20 per share by 2026 and $347.76 per share by 2030.

Long-term investors may find FedEx’s strengths and dividend yield appealing, though near-term volatility is likely amid a challenging

operating environment.