Street View: Muted demand, trade headwinds test FedEx's cost-cutting strategy

FedEx FDX.N on Tuesday signaled caution for the year ahead and forecast current-quarter profit short of market expectations amid volatile global demand

Shares down ~6% at $216.10 premarket

MACRO STILL HURTS

Morgan Stanley ("underweight," PT: $200) says "with this starting point, it is hard to bridge to FY EPS growth in 2026 unless there is an overwhelming upcycle"

Citigroup ("buy," PT: $259) says weak consumer sentiment and a challenged ISM manufacturing index remain headwinds
Says Express and Freight margins remain under pressure as savings from FedEx's cost cutting program are offset by macro challenges, but improved economic conditions could unlock significant gains once these headwinds ease

Daiwa Capital Markets("neutral") says weaker domestic B2B (business-to-business) and international trade volumes are likely to keep the pressure on margins in 1HF26 and outweigh management execution on the cost side

Jefferies ("buy," PT: $275) says "despite continued pressures on B2B volumes from persistent weakness in the industrial economy, we're ultimately constructive that FDX is taking the right actions to fundamentally reduce its cost structure and capital intensity to structurally improve its earnings and FCF (free cash flow) profile"