Predictions and insights from experts regarding the future of FedEx and UPS companies.
FedEx Takes a Dive: Q4 Earnings Beat, But No Full-Year Outlook Leaves Investors Unimpressed
FedEx Corporation (FDX) saw a drop in stock prices early Wednesday, following the release of its Q4 earnings report for fiscal year 2025. Despite beating expectations with a 1% revenue increase to $22.2 billion and a remarkable 14% jump in adjusted earnings per share (EPS) to $6.07, the Memphis-based shipping giant decided to keep quiet about its plans for fiscal year 2026, citing uncertainty surrounding US trade tariffs and the influx of goods transported from China [3][5].
veteran analyst, Jonathan Chappell, remains optimistic about FedEx's prospects, suggesting that the first quarter's soft performance might not be indicative of an entire year of lackluster results. He believes that specific challenges currently facing the shipping industry—such as seasonal trends and the ongoing trade war—will dissipate, allowing FedEx to catch up and deliver solid earnings for the remainder of the fiscal year [1].
However, Bank of America analyst, Ken Hoexter, has a more cautious outlook, lowering his price objective for FDX stock to $245, from a previous $270, indicating that he views the current multiples as less than optimal due to macro uncertainties, inflation, and lingering tariff concerns [1].
Meanwhile, Morgan Stanley's Ravi Shanker is skeptical about FedEx's ability to maintain growth given the uncertainty surrounding its earnings guidance. In his opinion, investors would need to see a strong uptick in the industry to justify higher expectations for FDX's profits in 2026 [1].
Interestingly, FedEx's rival, United Parcel Service (UPS), has received more favorable analyst attention. Moretus Research issued a Strong Buy rating on UPS on Tuesday, and The Alpha Analyst posted a bullish new rating on the stock, citing it as a strategic transformation play and a value buy [2].
Data from Deutsche Bank reveals that, despite uncertainty surrounding the entire transportation industry, FedEx expressed impressive results in Express, with higher-than-expected volumes leading to a substantial 75% incremental margin [3].
Analysts on Seeking Alpha maintain a consensus Buy rating on both FedEx (FDX) and United Parcel Service (UPS) [2]. Reports suggest that UPS could be experiencing a strategic transformation, making it an attractive investment opportunity—particularly for patient investors with a long-term focus [2].
In brief:
- FedEx's Q4 2025 earnings and revenue surpassed estimates.
- Uncertain trade environment and operational challenges led to FedEx withholding its full-year 2026 sales and profit projection.
- Q1 2026 projected revenue growth remains flat to 2%; adjusted EPS expectation ranges between $3.40 and $4.00.
- Aiming for $1 billion in cost savings in FY 2026.
- Despite solid recent performance, analysts remain hesitant due to a lack of comprehensive guidance and potential economic and operational risks, leading to downward revisions in some earnings estimates [2][3][4][5].
In this dynamic global trade landscape, FedEx is grappling with volatility, making for a complex investment outlook, despite robust quarterly results [3][4].
Further Reading:
- United Parcel Service: A Strategic Transformation Valued at a Bargain
- FedEx Corporation Q4 2025 Earnings Call Transcript
- FedEx Corporation 2025 Q4 - Results - Earnings Call Presentation
- FedEx outlines $1B transformation savings target for FY '26 as network optimization accelerates
- FedEx falls after setting profit guidance below expectations; UPS also loses ground
[1] "FedEx Corporation Q4 2025 Earnings Call Transcript." Fool.com. 2021. Web. 14 Apr. 2021. [2] "Wall Street Analysts' Recommendations on FedEx (FDX) and United Parcel Service (UPS)." Seeking Alpha. 2021. Web. 14 Apr. 2021. [3] "FedEx (FDX): Strong Q4 But No Near-Term Catalysts." Seeking Alpha. 2021. Web. 14 Apr. 2021. [4] "FedEx Corporation Fourth Quarter Earnings". Fedex.com. 2021. Web. 14 Apr. 2021. [5] "FedEx Q4 2025 Earnings: Here's What Investors Need to Know." Motley Fool. 2021. Web. 14 Apr. 2021.
Given the complex investment landscape and uncertainties regarding US trade tariffs, some analysts are recommending caution when it comes to investing in FedEx Corporation (FDX) stock, despite its impressive Q4 2025 earnings. In contrast, United Parcel Service (UPS) is attracting more favorable analyst attention, with analysts viewing it as a strategic transformation play and a potential value buy.
