Key Stats for FedEx Stock
- Pre-market Price Change for FedEx stock: -2.7%
- $FDX Share Price as of Dec. 18: $287
- 52-Week High: $295
- $FDX Stock Price Target: $285
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What Happened?
FedEx (FDX) stock is down almost 3% in pre-market, even after the shipping giant crushed Wall Street’s earnings expectations.
The company posted adjusted earnings of $4.82 per share on revenue of $23.5 billion, handily beating analyst estimates of $4.11 per share and $22.80 billion in revenue.
FedEx also raised its full-year earnings guidance to $17.80 to $19 per share, up from the previous range of $17.20 to $19.
CEO Raj Subramaniam told CNBC’s Jim Cramer that the company is winning in key business-to-business segments. “FedEx is the heartbeat of the industrial economy,” he said, highlighting strength in healthcare, aerospace, defense, and the emerging data center market driven by AI investments.
FedEx Express, the company’s largest segment, grew revenue 8% year-over-year and saw operating income jump 24%.
The overall business delivered 7% revenue growth and 17% adjusted operating income growth, despite multiple headwinds, including a grounded MD-11 fleet and ongoing weakness in the industrial economy.
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What the Market Is Telling Us About FedEx Stock
Investors should be encouraged by the Q2 beat, which demonstrates the company’s ability to grow earnings at a double-digit pace while navigating a challenging environment. Management’s focus on business-to-business customers appears to be paying off, with B2B now representing 66% of total revenue.
Subramaniam noted that while U.S.-China trade has declined, FedEx is capturing growth elsewhere. “China’s trade surplus is actually up, meaning there’s more traffic going to other parts of the world,” he explained.
The company is seeing increased volumes on intra-Asia routes, as well as on routes to Europe, Latin America, and India.
FedEx stock also benefited from management’s confidence in raising guidance despite ongoing challenges. The company expects to deliver $1 billion in transformation-related savings this year and remains on track to spin off FedEx Freight on June 1, 2026.
However, FedEx faces near-term pressure from tariffs, weak demand in the less-than-truckload (LTL) market, and the unexpected grounding of its MD-11 aircraft fleet.
Management warned that third-quarter earnings will be sequentially lower than Q2 due to these factors, though Q4 is expected to be the strongest quarter of the year.
Still, the company’s ability to expand margins by 60 basis points and deliver 19% adjusted EPS growth in Q2 demonstrates the strength of its ongoing transformation initiatives.
For long-term investors, FedEx stock looks positioned to benefit from its focus on high-value B2B segments and the eventual recovery in freight demand.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
