Core Insights - FedEx reported strong fiscal first-quarter earnings, exceeding both revenue and earnings expectations, leading to a 5% increase in stock price in after-hours trading [1][4] Financial Performance - The company achieved a net income of $820 million, or $3.46 per share, for the first fiscal quarter ended August 31, compared to $790 million, or $3.21 per share, in the same period last year [2] - Adjusted net income, accounting for FedEx Freight spin-off costs, was $910 million or $3.83 per share, surpassing the expected $3.59 [2][4] - Revenue for the quarter was $22.24 billion, exceeding the expected $21.66 billion [4] Operational Metrics - Average daily volumes in the U.S. increased by 6% overall [3] - FedEx anticipates revenue growth in 2026 to be between 4% and 6%, significantly higher than Wall Street's estimate of 1.2% [3] - The company projects full-year earnings per share for fiscal year 2026 to be in the range of $17.20 to $19, with a midpoint of $18.10, close to the estimate of $18.21 [3]

By Abhinav Parmar and Lisa Baertlein (Reuters) - FedEx (FDX) reported quarterly profit and revenue above Wall Street estimates, as cost-cutting and strength in domestic deliveries helped offset weaker international volumes after the U.S. ended tariff exemptions on low-value, direct-to-consumer shipments. Shares of Memphis-based FedEx climbed 5% in premarket trading on Friday after surprising Wall Street. Analysts had expected profit per share to fall due to the end of "de minimis" exemptions, which allow ...

Core Viewpoint - FedEx Corp. reported consolidated results for the first quarter of fiscal 2026, showing revenue growth compared to the previous year, with adjusted operating income also increasing [1]. Financial Performance - Revenue for the first quarter of fiscal 2026 was $22.2 billion, up from $21.6 billion in fiscal 2025, indicating a year-over-year increase of approximately 2.8% [1]. - Operating income for the first quarter of fiscal 2026 was reported at $1.19 billion, compared to $1.08 billion in the same quarter of fiscal 2025, reflecting a growth of about 10.2% [1]. - The operating margin improved to 5.3% in fiscal 2026 from 5.0% in fiscal 2025, indicating enhanced operational efficiency [1].

Core Viewpoint - FedEx is expected to report mediocre performance with earnings around $3.65, and the focus will be on consumer traffic and guidance for future performance [1][2][3]. Earnings Expectations - The earnings report is anticipated to show a mixed performance, as FedEx previously beat expectations but faced stock punishment due to lack of guidance for 2026 [3][4]. - Companies that provide clear guidance, especially regarding tariffs, have been rewarded, while those that are reluctant to give guidance have faced negative market reactions [4][5]. Operational Efficiency - FedEx is concluding its Drive program aimed at consolidating divisions and enhancing operational efficiencies, which may improve cost management [6]. - The company is also transitioning to a "Network 2.0" strategy to further enhance operational efficiency, although uncertainty around tariffs has impacted overall guidance [6][7]. Tariff Impact - The expiration of the de minimis exemption, which affects packages valued at $800 or less, could have significant implications for FedEx, although the immediate effects may not be visible in the current quarter [8][9]. Trading Strategies - Two trading strategies are being discussed: a bullish call diagonal and a bearish put calendar, both leveraging the dispersion in implied volatility levels [10][15]. - The bullish strategy involves buying a call option with a strike price of $227.12 and selling a higher strike call at $245, with a risk of approximately $740 [12][13]. - The bearish strategy involves buying a put option at $210 and selling the same put in a near-term option, with a risk of about $130 [16][17].

Core Insights - FedEx Corporation is experiencing a conservative outlook with analysts revising the average price target to $247 from $281, reflecting a decline in optimism over the past year [1][3] - The company is considered undervalued with a price-to-earnings ratio of 13x, indicating potential for stock price appreciation despite recent challenges [2][5] - FedEx's stock has a tendency to decline post-earnings announcements, even when revenue and earnings per share expectations are surpassed [4][5] Analyst Expectations - The average price target for FedEx has decreased significantly from $308.26 a year ago, indicating a shift in analyst sentiment [3] - Analyst Ki Bin Kim from Truist Financial has set a notably lower price target of $166, reflecting a cautious stance on the stock's future performance [4] - The upcoming first-quarter earnings report is anticipated to provide critical insights into FedEx's financial performance and future outlook [5] Market Dynamics - FedEx operates in a competitive transportation and logistics sector, facing challenges from economic conditions, fuel prices, and global trade dynamics [4][5] - The company competes with logistics giants such as UPS and DHL, which influences its market positioning and strategic initiatives [2]

Core Viewpoint - FedEx is expected to report earnings with an adjusted EPS of 3.65 and revenue exceeding 21 billion, reflecting a modest year-over-year growth of 1% despite a significant stock decline of 24% over the past year [1][3]. Company Performance - FedEx's stock has decreased by 24% over the last 52 weeks, while UPS has seen a 35% decline, contrasting with the broader market and industrial sector, which have increased by approximately 17% and 14% respectively [3]. - The company is facing challenges due to a post-COVID shipping slowdown and rising costs attributed to tariffs [1]. Technical Analysis - The stock is forming a symmetrical triangle pattern, indicating a period of consolidation as it approaches earnings, with key resistance levels identified between 240 and 245 [5][6]. - The moving averages are clustered together, suggesting a sideways movement, while the RSI indicates declining momentum leading into the earnings report [7]. Options Market Insights - The options market is pricing in a potential move of about ±7% post-earnings, equating to approximately $16.5 either way from the current share price of around $227 [11]. - A proposed trading strategy involves a double calendar position, buying a 245 strike call and a 210 strike put, while selling the same strikes in a shorter duration to capitalize on elevated implied volatility [12][13]. Trading Strategy - The strategy aims for profitability within a range of approximately 200 to 255, allowing for flexibility without needing to predict the stock's direction [14]. - The risk profile peaks at either 210 or 245, with a preference for movement towards these strikes for profitability [14][15].

So you cut your price target down to 240. The stock trades at about 226 right now. So you're not seeing a lot of upside movement.You also cut to neutral on your rating. What happened. Uh the stock hasn't moved a lot in the last 3 months, but why now.>> Well, it Good morning, Frank. Uh thanks for having me. And you're right.Uh this change of dimminimus, which went into effect in May for China and Hong Kong, went to the rest of the world at the end of August. And that's going to be a big issue for FedEx. We'r ...

So you cut your price target down to 240. The stock trades at about 226 right now. So you're not seeing a lot of upside movement.You also cut to neutral on your rating. What happened. Uh the stock hasn't moved a lot in the last 3 months, but why now.Well, it Good morning, Frank. Uh thanks for having me. And you're right.Uh this change of dimminimus, which went into effect in May for China and Hong Kong, went to the rest of the world at the end of August. And that's going to be a big issue for FedEx. We're g ...

Core Points - The Federal Reserve has initiated a rate reduction cycle, lowering the benchmark interest rate by 0.25 percentage points, with projections for two additional cuts by year-end, bringing the federal funds rate to a range of 3.5% to 3.75% [5][6] - The market's reaction to the rate cut was muted, with the S&P 500 index falling less than 0.1%, the Nasdaq Composite down 0.6%, and the Dow Jones Industrial Average rising 0.5% [3][4] - Fed Chair Jerome Powell highlighted the complexities of the current economic landscape, characterized by weakening job data and persistent inflation, indicating a challenging environment for monetary policy [6] Market Reactions - Stock futures showed positive movement ahead of the market open, with S&P 500 futures rising 0.8%, Nasdaq 100 contracts up 1.1%, and Dow Jones futures increasing by 0.7% [6] - The market had anticipated the rate cut, leading to minimal dramatic movements in stock prices upon the announcement [4] Economic Indicators - Initial jobless claims for the week of September 13 are expected to decrease to 240,000 from 263,000 in the previous week [7] - The Philadelphia Fed manufacturing survey is projected to rebound to 2% after a decline of 0.3% in August [7] - The Conference Board's Leading Economic Index has been declining, with a 2.7% drop from January to July 2025, and is expected to dip by 0.2% in the September reading [7]

Core Viewpoint - The financial report of FedEx (FDX.US) may provide insights into the sustainability of the current stock market rally, as indicated by the Dow Theory, which emphasizes the need for confirmation between industrial and transportation indices [1][4]. Group 1: Market Trends - The divergence between the Dow Jones Industrial Average, which has been reaching record highs, and the transportation index, which remains sluggish, signals potential market concerns [1][4]. - Since 2005, the current gap between these indices has only been observed during significant downturns, such as the 2008-2009 financial crisis and the 2020 pandemic [1]. Group 2: FedEx's Performance - FedEx's stock has declined by 20% since 2025, making it one of the worst performers in the S&P 500, while its competitor UPS has seen a 33% drop, reaching near lows not seen since 2013 [5]. - In contrast, the S&P 500 has risen by 12% this year, and the Dow Jones by 8%, while the transportation index has decreased by 2.5% [5]. Group 3: Financial Expectations - Analysts expect FedEx to report slight revenue and adjusted earnings growth in its Q1 FY2025 report, with market reactions likely hinging on the outlook for the holiday season [7][9]. - FedEx has only provided guidance for the current quarter, while UPS has abandoned its full-year earnings forecast [7]. Group 4: Policy Impact - Investors are particularly focused on how FedEx will address the impact of the cancellation of the "de minimis exemption," which previously allowed packages valued at $800 or less to enter the U.S. tax-free [9]. - The cancellation of this policy has intensified pressure on FedEx and UPS, especially after it was fully implemented globally in August [9]. Group 5: Theoretical Perspectives - The Dow Theory suggests that the current market conditions may indicate a "huge bull trap," as the divergence between the indices raises concerns about economic health [12]. - Some strategists argue that the Dow Theory may be less relevant in the digital age, as it does not account for the logistics data from major retailers like Amazon and Walmart, which have their own logistics systems [10].