FedEx Q3 revenue rises, lifts full-year revenue forecast

Overview

• U.S. logistics provider's fiscal Q3 revenue rose yr/yr, driven by package yield and volume gains

• Adjusted EPS for fiscal Q3 increased yr/yr

• Company raised full-year fiscal 2026 earnings outlook, citing transformation savings and network strength

Outlook

• FedEx raises fiscal 2026 revenue growth outlook to 6.0%-6.5% from 5%-6%

• Company now sees fiscal 2026 diluted EPS of $16.05-$16.85 before MTM retirement plan adjustments

• FedEx expects capital spending of no more than $4.1 bln for fiscal 2026, down from $4.5 bln

Result Drivers

• PACKAGE YIELD AND VOLUME - Co said higher U.S. domestic and International Priority package yields and increased U.S. domestic package volume drove improved operating income

• COST SAVINGS - FedEx cited continued cost savings from transformation initiatives as a driver of improved results

• FREIGHT SEGMENT COSTS - Co said FedEx Freight segment operating results decreased due to increased costs associated with the planned spin-off, lower shipments, and higher wage rates

Company press release: ID:nBw8CZNVla

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 18 "strong buy" or "buy", 9 "hold" and 3 "sell" or "strong sell"

• The average consensus recommendation for the courier, postal, air freight & land-based logistics peer group is "buy"

• Wall Street's median 12-month price target for FedEx Corp is $405.00, about 15.8% above its March 18 closing price of $349.74

• The stock recently traded at 16 times the next 12-month earnings vs. a P/E of 14 three months ago

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