FedEx (FDX) Stock Soars as Company Beats Wall Street Expectations

TLDR

Table of Contents

FedEx shares jumped 5.4% in premarket trading after beating profit expectations for Q1 fiscal 2025
Strong domestic delivery demand offset a 3% decline in international exports due to trade policy headwinds
Cost-cutting measures including parking planes and closing facilities helped drive profit growth of 2.2%
TD Cowen raised price target to $271 from $269, maintaining Buy rating on the stock
Company issued fiscal 2026 guidance below some analyst estimates but maintains plan to spin off Freight division in June 2026

FedEx shares climbed 5.4% in premarket trading Friday morning following better-than-expected quarterly results. The logistics giant surprised Wall Street with its first-quarter performance for fiscal 2025.

The company reported adjusted earnings per share of $3.83, beating the consensus estimate of $3.60. This represented a 2.2% increase compared to the same period last year.

Strong domestic delivery volumes drove the positive results. Summer holiday demand boosted U.S. parcel shipments during the quarter. Overall average daily volumes rose 4% despite international challenges.

FedEx, $FDX, Q1-26. Results:
📊 Adj. EPS: $3.83 🟢
💰 Revenue: $22.2B 🟢
📈 Net Income: $820M
🔎 Strong U.S. domestic package growth and structural cost reductions boosted operating performance. pic.twitter.com/lLojv35Ili
— EarningsTime (@Earnings_Time) September 18, 2025

International exports declined 3% during the period. Trade policy changes created headwinds for cross-border shipping volumes. The end of “de minimis” exemptions for shipments under $800 contributed to this decline.

Revenue per package increased 2% during the quarter. This pricing improvement helped offset some volume pressures. The company generated total revenue of $88.59 billion for the reporting period.

Cost-Cutting Measures Show Results

FedEx’s efficiency initiatives contributed to the profit beat. The company has implemented various cost-reduction strategies over recent quarters. These measures include parking aircraft to reduce operational expenses.

Facility closures and unit mergers also helped trim costs. The logistics provider aims to slash billions of dollars in expenses through these programs. Management views these steps as necessary to maintain competitiveness.

The company ended its two-decade partnership with the U.S. Postal Service last year. This contract had consistently pressured earnings with high costs and thin profit margins. The decision removed this headwind from current operations.

Analyst Response and Price Targets

TD Cowen raised its price target to $271 from $269 while maintaining a Buy rating. The firm acknowledged FedEx’s ability to beat expectations despite trade challenges. The new target reflects confidence in the company’s operational improvements.

Multiple other analysts updated their views following the earnings release. UBS increased its price target to $314 from $293 with a Buy rating. Jefferies raised its target to $280, calling the results “better than feared.”

Wells Fargo set a $250 price target, describing the outlook as “better than expected.” BMO Capital lowered its target to $255 due to guidance concerns. BofA Securities increased its target to $244, emphasizing strong earnings performance.

FedEx provided fiscal 2026 guidance that came in below some Wall Street estimates. The company expects approximately 5% top-line growth at the midpoint. This forecast disappointed analysts who had hoped for stronger projections.

The Freight segment missed analyst expectations by a wide margin. Industrial headwinds continue to pressure this division’s performance. Management maintains plans to spin off the Freight unit in June 2026.

FedEx trades at 11.83 times projected 12-month forward earnings. Competitor UPS trades at 12.04 times forward earnings. Both stocks have underperformed the broader market recently due to industrial demand softness.

UPS shares also gained nearly 2% in premarket trading. The logistics sector often moves together on industry-related news. Investors view both companies as bellwethers for global trade conditions.

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