What's Going On With FedEx Shares?

Core Viewpoint - FedEx's recent quarterly results disappointed investors, leading to a significant drop in share prices, and the outlook for both FedEx and its competitor UPS appears bearish [1][12]. FedEx Quarterly Results - FedEx reported earnings per share (EPS) that fell short of the Zacks Consensus estimate by 25%, with sales of $21.6 billion, which was 2% lower than expected [2]. - Year-over-year, EPS decreased by 20%, while sales saw a marginal decline of 0.4% compared to the same period last year [2]. - The company narrowed its fiscal year 2025 earnings and sales outlook, with total sales expectations of $89.9 billion, reflecting a 4% decrease from the previous year and suggesting a 2.6% growth year-over-year [4]. Management Commentary - The CEO of FedEx emphasized the company's focus on transforming its network, improving efficiency, and reducing costs while remaining confident in future value-creation opportunities [4]. Earnings Expectations - Earnings expectations for FedEx have been revised lower, with a forecast of 15% EPS growth relative to last year, indicating a negative trend that may hinder stock performance [6]. - The stock has experienced significant volatility following quarterly releases over the past two years, with the recent drop being consistent with this pattern [6]. Economic Context - Despite signs of moderation at the consumer level, the overall economy has shown resilience, suggesting that FedEx's results may not accurately reflect broader economic trends [8]. Comparison with UPS - United Parcel Service (UPS), a key competitor, has also faced negative earnings outlooks, with its stock currently rated Zacks Rank 4 (Sell), indicating potential near-term share pressure [9]. - UPS's upcoming quarterly results are expected to show stagnant sales expectations, with EPS revisions down 20% over recent months [9]. Overall Market Outlook - The outlook for both FedEx and UPS appears bearish, with investors advised to wait for a more constructive earnings outlook before considering investments in either stock [12].