FedEx (FDX) Stock Forecast & Price Target

FedEx, as the world's largest express package provider, generated 86% of its total revenue from its Federal Express segment in fiscal 2025, highlighting its dominant position in the market. The company successfully implemented a cost management strategy through its DRIVE initiative, achieving approximately $4 billion in savings from FY23 to FY25, including over $650 million in a single quarter. With expectations of long-term growth opportunities and an anticipated recovery in secular trends post-COVID, FedEx is strategically positioned to capitalize on market dynamics in a more disciplined global logistics environment.

FedEx experienced a deterioration in its operating ratio, which increased by 40 basis points year-over-year to 79.2%, compounded by a 4% decline in revenue. Additionally, shipment volumes decreased by 1% year-over-year, with further declines in weight per shipment and revenue per shipment of 3% and 1%, respectively, indicating a negative impact on the company's mix and yield, particularly within the B2B segment. The outlook for FedEx remains challenging, with revised models projecting lower revenue and margins compared to the previous year, alongside a 6% decline in EBIT.