FedEx to Report Q3 Earnings: Should You Buy, Sell or Hold the Stock?

Core Viewpoint - FedEx Corporation (FDX) is expected to report its third-quarter fiscal 2026 results on March 19, with earnings per share (EPS) estimated at $4.14 and revenues at $23.59 billion, reflecting a mixed performance compared to the previous year [2][3][8]. Earnings Estimates - The consensus estimate for EPS has been revised upward by 1.97% over the past 60 days, although it represents an 8.2% decline from the year-ago actual [3]. - Revenue estimates indicate a 6.5% increase compared to the same quarter last year [3]. Earnings Surprise History - FedEx has a strong earnings surprise history, with an average surprise of 5.68% across the last four quarters [5]. Cost Reduction Initiatives - The company's bottom-line performance is expected to benefit from cost-reduction initiatives under the DRIVE program, which includes reducing flight frequencies, parking aircraft, and cutting staff [6]. - Leveraging artificial intelligence for routing optimization and capacity planning is also anticipated to lower costs and support margins [6]. Revenue Drivers - Focus on growing premium B2B and B2C volumes, especially in the healthcare sector, is likely to enhance yields [7]. - A rate increase announced in January for FedEx parcel and Freight LTL services is expected to contribute positively to revenues [7]. Strategic Partnerships - An update on FedEx's multi-year deal with Amazon is anticipated, which involves delivering select large packages for Amazon, especially relevant after UPS reduced its volumes with Amazon [9]. Earnings Prediction - The company has a positive Earnings ESP of +2.30%, indicating a higher chance of beating earnings estimates [10]. Stock Performance - FedEx shares have outperformed the Zacks Transportation-Air Freight and Cargo industry and rival UPS, driven by cost-reduction efforts, with double-digit growth in the third quarter of fiscal 2026 [12]. Valuation Metrics - FedEx shares are currently trading at a discount based on forward 12-month Price/Sales (P/S) compared to the industry average and UPS, with a Value Score of B [15]. Long-term Outlook - Despite near-term headwinds such as tariff-related uncertainties and inflation, FedEx is positioned to generate steady cash flows in the long run, making it a compelling long-term investment in the transportation sector [19].