FedEx Earnings Win, Guidance Loss: FDX Stock Tanks $15 – $200 Next Target?

Quick overview

FedEx shares tumbled over 6% in after-hours trade, as investor optimism waned despite a strong Q1 earnings beat, with concerns centering on the company’s cautious guidance and future growth visibility.

Solid Q4 Beat Overshadowed by Weak Guidance

FedEx (NYSE: FDX) posted strong fiscal Q1 2025 results, surpassing Wall Street expectations with $22.2 billion in revenue and adjusted earnings per share (EPS) of $6.07. The quarter capped off a cost-focused year in which FedEx implemented aggressive efficiency measures to protect margins amid challenging economic conditions.

Yet despite these strong headline numbers, investors reacted negatively, with the stock dropping over 6% in after-hours trading due to the company’s lack of full-year EPS guidance for fiscal 2026.

Market Responds to Uncertainty

While FedEx continues to focus on cutting costs and returning capital to shareholders, management’s cautious tone about the year ahead—combined with no clear earnings outlook—triggered a sharp pullback. The absence of a firm forecast suggests that macroeconomic headwinds and softening global trade demand may persist well into FY26.

Although FedEx has benefitted from strong execution of its DRIVE cost-cutting program and returned over $4.3 billion to shareholders via buybacks and dividends, growth concerns remain front and center.

Technical Picture Weakens – The Gap Will BE Big Tomorrow

Technically, the FDX share price opened Tuesday with a bullish gap at $232.10, attempting to reclaim recent highs. But the rally quickly stalled at the 100-day simple moving average (SMA) resistance.

After closing the regular session at $229.21, FedEx stock plunged more than $14 to $215.55 post-earnings. That puts the price back above the key $213–$214 support zone, but it is now poised to open below the 50-day SMA, suggesting near-term downside risks.

If that support fails to hold, the stock may revisit its April low of $194.50, especially if growth signals remain weak through Q3.

FedEx Q1 2025 Earnings Report

• Strong Q1 FY2025 Performance:
  FedEx exceeded Wall Street’s expectations with $22.2 billion in revenue and adjusted EPS of $6.07, signaling effective cost control and operational efficiency.
• Cost-Cutting Success via DRIVE Program:
  The company achieved $2.2 billion in structural cost reductions under its DRIVE initiative in FY2025 and plans to cut an additional $1 billion by FY2026.
• Slight Revenue Decline:
  Annual revenue edged down slightly from $87.7 billion in FY2024 to $87.4 billion in FY2025, reflecting macroeconomic softness and subdued trade volumes.
• Generous Shareholder Returns:
  FedEx returned $4.3 billion to shareholders in FY2025 through stock buybacks and dividends, exceeding initial plans. A 5% dividend increase is targeted for FY2026 alongside continued aggressive buybacks.
• Muted EPS Guidance for FY2026:
  Management withheld full-year EPS guidance and forecast Q1 FY2026 EPS between $3.40 and $4.00, below analyst expectations — triggering investor caution about earnings visibility.
• Economic & Structural Pressures:
  Concerns persist about slowing e-commerce, weak corporate shipping demand, and global trade tensions, weighing on FedEx’s growth outlook.
• Valuation and Market Perception:
  FedEx is increasingly being perceived as a defensive, value-oriented stock, trading at just 11x forward earnings, with limited near-term growth catalysts.

Conclusion: Despite delivering a quarterly earnings beat and executing well on cost discipline, FedEx’s conservative guidance has overshadowed its operational achievements. With growth catalysts such as e-commerce and global shipping still recovering slowly, the company now trades more like a defensive yield stock than a growth-oriented logistics leader. Until macro clarity returns, FDX could remain range-bound or under pressure.

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Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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