Should You Buy, Sell or Hold FedEx Stock Before Q2 Earnings?

FedEx Corporation FDX is set to release its second-quarter fiscal 2026  (ended Nov. 28, 2025) results on Dec. 18, after market close. The Zacks Consensus Estimate for the to-be-reported quarter’s earnings per share and revenues is pegged at $4.05 and $22.9 billion, respectively.

The Zacks Consensus Estimate for second-quarter fiscal 2026 earnings has been revised upward by 1.5% in the past 60 days. Additionally, the consensus mark is similar to the year-ago actual. The Zacks Consensus Estimate for second-quarter fiscal 2026 revenues indicates a 4.1% upward movement from the year-ago actual.

FDX has an impressive earnings surprise history, as reflected in the chart below.

Given this backdrop, let's examine the factors that night have influenced FDX’s fiscal second-quarter results.

We expect FDX’s results in the to-be-reported quarter to have been boosted by the high package volumes, courtesy of the increased demand during the holiday shipping season. Management has indicated expectations of a moderately strong peak season. At the Baird Global Industrial Conference, FDX’s CFO John Dietrich stated that earnings per share in the to-be-reported quarter are likely to exceed the year-ago actual of $4.05.

The bottom-line performance in the to-be-reported quarter is also 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. Cost-reduction efforts, particularly in line-haul expenses and productivity, are expected to have supported margins in the fiscal second quarter.

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 deal comes soon after FDX’s rival, United Parcel Service UPS, decided to lower its volumes with Amazon.

Q2 Earnings Whispers for FDX

Our proven model predicts 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 exactly the case here.

Earnings ESP: FedEx has an Earnings ESP of +1.38% (the most accurate estimate of $4.10 is pegged at 5 cents above the Zacks Consensus Estimate). 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 #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

FDX Stock Outperforms Industry & UPS in Q2

Driven by the cost-reduction efforts and strong holiday season demand, shares of FDX have increased in double-digits in the second quarter of fiscal 2026 (September-November), outperforming the Zacks Transportation—Air Freight and Cargo industry and rival United Parcel Service.

Q2 Price Comparison

FDX Trading Cheap 

Based on forward 12-month Price/Sales (P/S), FDX’s shares are trading at a discount compared with the industry average as well as United Parcel Service. FDX currently has a Value Score of A.

FDX’s P/S F12M Vs. Industry & UPS

Investment Thesis for FDX Stock

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 fiscal 2023, FedEx announced DRIVE, a comprehensive program to improve its long-term profitability.

The company’s efforts to reward its shareholders are likely to support the 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. 

Conclusion: Opportune Time Buy FDX Stock

FDX’s efforts to control costs are serving it well and driving bottom-line growth. 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. Also, it is worth noting that the company has the brand and the network to continue generating steady cash flows in the long run.

Upbeat demand driven by the holiday rush is expected to boost fiscal second-quarter results. FDX’s strong earnings history reinforces its investment appeal. With these multiple positives at play, FDX stands out as an attractive investment opportunity at this time. This undervalued stock is an ideal candidate for addition to one’s portfolio ahead of its fiscal second-quarter results. 

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This article originally published on Zacks Investment Research (zacks.com).

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