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FedEx Corporation FDX is set to release its first-quarter fiscal 2026 (ended Aug. 31, 2025) results on Sept. 18, after market close.
The Zacks Consensus Estimate for first-quarter fiscal 2026 earnings has been revised downward by 1.1% in the past 60 days and is now pegged at $3.68 per share. Additionally, the consensus mark implies a 2.2% increase from the year-ago actual. The Zacks Consensus Estimate for first-quarter fiscal 2026 revenues is pegged at $21.8 billion, indicating a 0.8% upward movement from the year-ago actual.
FDX has a mixed earnings surprise history, as reflected in the chart below.
Given this backdrop, let's examine the factors likely to influence FDX’s first-quarter results.
We expect average daily shipments in the to-be-reported quarter to have been hurt by the weak demand scenario. Tariff-related tensions are likely to have adversely impacted demand and top-line performance in turn.
The performance of the Express unit, FDX's largest segment, is likely to have been hurt due to demand-induced volume weakness. We anticipate revenues from the Express unit to increase marginally from the first-quarter fiscal 2025 actual. The bottom-line performance in the to-be-reported quarter is likely to have been aided by cost-reduction benefits from the DRIVE program initiatives.
These cost-reduction initiatives include reducing flight frequencies, parking aircraft and cutting staff. We anticipate adjusted operating expenses in the to-be-reported quarter are expected to increase marginally from the year-ago actuals.
We expect an update from management on FDX’s multi-year deal with Amazon AMZN, which was signed earlier in the year. Per the agreement, FDX is responsible for delivering select large packages for Amazon. The FDX-Amazon deal comes soon after FDX’s rival, United Parcel Service UPS, decided to lower its volumes with Amazon.
Our proven model does not conclusively predict an earnings beat for FDX this time. A company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, has a higher chance of beating estimates, which is not the case here.
Earnings ESP: FedEx has an Earnings ESP of -6.97%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Driven by the cost-reduction efforts, shares of FDX have increased 5.9% in the first quarter of fiscal 2026 (June-August) compared with the Zacks Transportation—Air Freight and Cargo industry’s 3.2% decline. Moreover, FDX’s price performance is better than that of UPS.
On the basis of forward 12-month Price/Sales (P/S), FDX shares are trading at a discount compared to the industry average as well as UPS. FDX currently has a Value Score of A.
Tariff-related uncertainty and still-high inflation have been hurting consumer sentiment and growth expectations. FDX continues to struggle due to the normalization of volume and pricing trends in the post-COVID scenario. In the second quarter of 2023, FedEx announced DRIVE, a comprehensive program to improve its long-term profitability. Driven by technology-focused consolidation and improved efficiencies, management expects to achieve $1 billion of transformation-related savings, which includes DRIVE and Network 2.0 in fiscal 2026.
The company’s efforts to reward its shareholders are likely to support its share price. In June 2025, FedEx raised its quarterly dividend by 5.1% to $1.45 per share (or $5.80 annually). FDX is also active on the buyback front. Despite near-term challenges, it’s worth noting that the company has the brand and the network to continue generating steady cash flows in the long run.
Agreed that FDX has strong long-term potential (the company’s long-term [3-5 years] earnings growth rate is an impressive 10.4%, higher than its industry’s 9.5%) and is attractively valued, but the current market conditions and challenges suggest that now may not be the best time to purchase additional shares. The industry is experiencing a period of uncertainty with supply-chain concerns and fluctuating demand. Investors have ample reason to be wary of investing in FDX stock currently.
As there is significant doubt about whether the challenges facing FDX will ease in the short term, investor sentiment surrounding this transportation heavyweight is unlikely to get a boost anytime soon.
So, all in all, it is worth holding on to FDX stock now. Investing ahead of its upcoming results doesn’t seem like a good idea. It’s better to wait for management’s commentary on tariffs and updated guidance to see the potential impact.
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This article originally published on Zacks Investment Research (zacks.com).
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