FedEx Shares Slip After Fiscal Q4 Earnings: ETFs in Focus
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 25 2025
0mins
Should l Buy FDX?
Source: NASDAQ.COM
FedEx Earnings Report: FedEx reported strong fourth-quarter fiscal 2025 results, exceeding earnings and revenue estimates, but provided a cautious outlook that led to a more than 5% drop in shares after market close. The company achieved its $4 billion cost-cutting goal and plans to cut an additional $1 billion in the upcoming fiscal year.
Impact on ETFs: The disappointing outlook from FedEx is expected to affect several ETFs with significant allocations to the company, including ProShares Supply Chain Logistics ETF, iShares U.S. Transportation ETF, First Trust Nasdaq Transportation ETF, and Pacer Industrials and Logistics ETF, which all have varying degrees of exposure to FedEx's performance.
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Analyst Views on FDX
Wall Street analysts forecast FDX stock price to fall
20 Analyst Rating
13 Buy
6 Hold
1 Sell
Moderate Buy
Current: 367.160
Low
210.00
Averages
315.05
High
365.00
Current: 367.160
Low
210.00
Averages
315.05
High
365.00
About FDX
FedEx Corporation provides customers and businesses with a portfolio of transportation, e-commerce, and business services. The Company offers integrated business solutions utilizing its flexible and efficient global network. Its segments include Federal Express, FedEx Freight, and Corporate, other, and eliminations. Federal Express segment includes express transportation, small-package ground delivery, and freight transportation, and it also operates combined sales, marketing, administrative, and information-technology functions in shared service operations for United States customers. FedEx Freight segment includes FedEx Freight (LTL freight transportation) and FedEx Custom Critical (time-critical transportation). Corporate, other, and elimination segments include FedEx Dataworks, Inc. (FedEx Dataworks), FedEx Office and Print Services, Inc. (FedEx Office), and FedEx Logistics, Inc. (FedEx Logistics). FedEx Logistics offers customs brokerage, specialty transportation, and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Financial Targets: The company set ambitious financial targets for 2029, projecting revenue of approximately $98 billion (4% CAGR), operating income of about $8 billion (17% GAAP CAGR), and an increase in return on invested capital to 11%, indicating strong growth potential and profitability.
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- Impact on the Industry: This change suggests that freight brokers may need to adapt to remain competitive in an increasingly automated environment.
- Future Considerations: The situation raises questions about the long-term implications of AI on various sectors within the logistics and transportation industries.
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- Limitations of AI: AI cannot perform physical tasks such as cooking, delivering packages, or farming.
- Human Dependency: Despite advancements in AI, human involvement is still essential for various everyday activities.
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- Revenue Growth Outlook: FedEx projects consolidated revenue of approximately $98 billion by fiscal 2029, reflecting a 4% compound annual growth rate, indicating sustainable growth driven by digital innovation and new business lines.
- Earnings Exceeding Expectations: The company anticipates adjusted earnings per share for the third quarter to surpass Wall Street's forecast of $3.99, attributed to an 'exceptional' holiday season, showcasing strong market demand and operational efficiency.
- Investment in Digital Transformation: FedEx is significantly investing in digital intelligence, with CEO Raj Subramaniam highlighting that automation innovations are setting the company apart from competitors and contributing to revenue growth.
- International Market Expansion: The company aims for an 8% operating margin in Europe and has reached an agreement to acquire European company InPost at €15.60 per share, further enhancing its competitive position in international markets.
See More
FedEx Investor Day Highlights Future Growth Strategies
- Strategic Priorities: At the 2026 Investor Day, FedEx outlined its goal to achieve approximately $98 billion in revenue by 2029, reflecting a 4% CAGR, while aiming to increase operating income to around $8 billion, indicating strong confidence in future growth.
- InPost Acquisition: FedEx has reached a conditional agreement to acquire European parcel locker leader InPost at €15.60 per share, which is expected to contribute positively to earnings in the first year and solidify its market position, showcasing strategic growth initiatives.
- Technology Integration: CEO Raj Subramaniam emphasized that integrating digital intelligence is pivotal to the company's strategy, which is expected to enhance FedEx's extensive industrial network, significantly boosting profitability and shareholder returns, highlighting the company's commitment to innovation.
- Financial Outlook: FedEx anticipates that its adjusted EPS for Q3 2026 will exceed consensus estimates, with projected revenues of $23.42 billion, demonstrating exceptional execution during the peak season and reinforcing market confidence in its future performance.
See More
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- Revenue Growth Target: FedEx projects approximately $98 billion in consolidated revenue by fiscal year 2029, reflecting a strong 4% compound annual growth rate over the next three years, indicating robust growth potential in the market.
- Third Quarter Earnings Outlook: The company expects its third-quarter earnings per share to exceed Wall Street's forecast of $3.99, primarily due to an 'exceptional' holiday season, suggesting a significant boost in profitability during peak periods.
- Business Spin-off Plan: FedEx plans to spin off its freight business into a separate publicly traded company in June, a strategic move aimed at enhancing business focus and unlocking potential shareholder value.
- Digital Investment: The company is increasing its investment in digital intelligence, with CEO Subramaniam stating that innovations in automation will set FedEx apart from competitors, driving revenue growth and increasing operating income to $8 billion by 2029.
See More
