Key Stats for FedEx Stock
- Price Change for FedEx stock: 5.5%
- $FDX Share Price as of Nov. 11: $268
- 52-Week High: $309
- $FDX Stock Price Target: $270
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What Happened?
FedEx (FDX) stock surged 5.5% on Tuesday after CFO John Dietrich told investors that fiscal Q2 earnings would beat last year’s $4.05 per share result.
The guidance exceeded analyst expectations of $4.02 per share and represented a significant improvement from the $150 million adjusted operating income the company achieved in Q1, despite trade policy headwinds.
The positive update eased concerns about a weak holiday shipping season and ongoing challenges from tariffs.
Dietrich confirmed FedEx expects both sequential improvement from Q1 to Q2 and year-over-year gains, with operating margins at FedEx Corporation (excluding freight) improving on a quarter-over-quarter basis.
CEO Raj Subramaniam emphasized the company is “fully ready for peak” despite an extra operating day this year and ongoing tariff uncertainty.
The guidance came amid fresh challenges from the FAA-mandated grounding of MD-11 aircraft following last week’s fatal UPS cargo plane crash.
FedEx owns 34 MD-11s, with 28 in operation and 25 in the active fleet, and is working closely with Boeing and the FAA on inspections and expects aircraft to return to service on a tail-by-tail basis in the coming days.
Management noted they’re leveraging spare aircraft, adjusting maintenance schedules, and using commercial airlift partnerships to maintain operations.
Separately, FedEx is navigating roughly $1 billion in full-year profit headwinds from trade policy changes, with about $700 million stemming from lower international revenue, which is heavily weighted to China-to-US lanes, and de minimis changes.
However, the logistics leader is seeing offsetting growth in other areas, with US outbound air freight up 22% and increased volumes from Singapore as supply chains shift away from direct sourcing in China.
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What the Market Is Telling Us About FDX Stock
The rally in FedEx stock reflects relief that peak season appears manageable despite multiple headwinds converging simultaneously.
Citi analyst Ari Rosa called it “something of a relief rally when people have been pretty negative on the prospects for both FedEx and UPS.”
The delivery sector has faced challenges over the past 12-24 months, including weak e-commerce volumes, pricing pressure, and now tariff-related disruptions.
The MD-11 grounding accounts for approximately 4% of FedEx’s fleet, compared to 9% for UPS, giving FedEx a relative advantage.
However, both carriers will face higher costs due to relying on third-party charters during the peak season.
JPMorgan analyst Brian Ossenbeck noted “protecting service during peak comes at a cost,” particularly as increased demand for charter capacity could push air freight rates higher.
Subramaniam emphasized FedEx’s ability to adapt its global network quickly as supply chains shift from trans-Pacific routes to intra-Asia and Asia-Latin America lanes.
As the largest customs broker in America, FedEx is leveraging data and AI to help customers navigate complex classification codes in the post-de minimis environment.
For FedEx stock to sustain gains, execution during peak will be critical. The company needs to demonstrate it can offset the $1 billion tariff headwind through network optimization and cost discipline.
The planned spin-off of FedEx Freight remains on track, with investor days scheduled for February 11-12 in Memphis for the core FedEx business and a spring event in New York for the freight unit.
Management’s emphasis on “two world-class companies” creating shareholder value suggests confidence in the separation thesis.
The stock’s 5% surge indicates that investors are willing to give FedEx credit for navigating a complex environment, but sustained outperformance will require proof in upcoming quarterly results.
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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!
