Core Insights - FedEx Corporation reported an earnings per share (EPS) of $3.83, exceeding estimates and showcasing a +4.93% earnings surprise [2][6] - The company's revenue for the quarter ending August 2025 was $22.2 billion, surpassing estimates and reflecting a nearly 3% year-over-year increase [3][6] - FedEx reinstated its full-year outlook, anticipating revenue growth of 4% to 6% for the fiscal year [4][6] Financial Performance - EPS of $3.83 surpassed the estimated $3.61 and improved from $3.60 reported in the same quarter last year [2][6] - Revenue of $22.2 billion exceeded the estimated $21.65 billion and was a 2.15% increase over the Zacks Consensus Estimate [3][6] - The company has consistently exceeded consensus revenue estimates in three of the last four quarters [3] Strategic Initiatives - FedEx is on track to cut costs by $1 billion by fiscal 2026 and plans to spin off its freight business by next June [5][6] - The company has a P/E ratio of approximately 13.17 and a price-to-sales ratio of about 0.61, indicating strong market valuation [5] Market Reaction - Following the earnings report, FedEx shares surged over 5% in after-hours trading [4]

Core Insights - FedEx Corporation (FDX) is scheduled to report its first-quarter fiscal 2026 results on September 18, 2025, after market close [1] - The Zacks Consensus Estimate for earnings is $3.68 per share, reflecting a 2.2% increase from the previous year, while revenues are expected to be $21.8 billion, indicating a 0.8% increase [2] Earnings Performance - FDX has a mixed earnings surprise history, with an average surprise of -5.53% across recent quarters [3][4] - The company is expected to face challenges in average daily shipments due to weak demand and tariff-related tensions [5] Segment Analysis - The Express unit, FDX's largest segment, is anticipated to experience volume weakness, although revenues may increase slightly compared to the first quarter of fiscal 2025 [6] - Cost-reduction initiatives from the DRIVE program are expected to aid bottom-line performance, despite a marginal increase in adjusted operating expenses [7] Strategic Developments - An update on FDX's multi-year deal with Amazon is anticipated, which involves delivering select large packages for the e-commerce giant [7][8] - The FDX-Amazon deal comes after rival UPS decided to lower its volumes with Amazon, indicating a strategic shift in partnerships [9] Market Position - FDX shares have outperformed the Zacks Transportation—Air Freight and Cargo industry, increasing by 5.9% in the first quarter of fiscal 2026, compared to a 3.2% decline in the industry [12] - FDX is trading at a discount based on forward Price/Sales (P/S) ratios compared to the industry average and UPS, with a Value Score of A [14] Long-term Outlook - Despite current challenges, FDX has a long-term earnings growth rate of 10.4%, higher than the industry average of 9.5% [19] - The company has raised its quarterly dividend by 5.1% to $1.45 per share, indicating a commitment to rewarding shareholders [18] Investment Considerations - Current market conditions and uncertainties suggest that it may not be the best time to purchase additional shares of FDX [19][20] - Investors are advised to wait for management's commentary on tariffs and updated guidance before making investment decisions [20]

Core Viewpoint - The Zacks Transportation—Air Freight and Cargo industry is facing significant challenges due to ongoing supply-chain disruptions, high inflation, and weaker demand, leading to reduced package volumes [1][4]. Industry Overview - The industry comprises companies providing air delivery and freight services, with many offering specialized transportation and logistics solutions. The health of these companies is closely tied to the overall economy, with major players like FedEx transporting millions of packages daily [3]. Key Trends - **Economic Uncertainty & Tariff Concerns**: The industry is affected by market volatility and tariff uncertainties, particularly with China, which may lead to higher costs and dampen consumer spending [4]. - **Demand Slowdown**: A decline in shipping demand, especially in Asia and Europe, is negatively impacting key players like UPS and FedEx, leading to withheld earnings and revenue forecasts [5]. - **Strong Financial Returns for Shareholders**: Companies are increasing dividends and buybacks to reward shareholders, indicating financial strength. UPS raised its quarterly dividend to $1.64 per share, while FedEx increased its dividend by 5.1% to $1.45 [6]. Industry Performance - The Zacks Air Freight and Cargo industry ranks 202, placing it in the bottom 18% of 245 Zacks industries, indicating poor near-term prospects [7][8]. - The industry has underperformed the S&P 500, decreasing by 26.5% over the past year compared to the S&P 500's increase of 17.7% [9]. Current Valuation - The industry is currently trading at an enterprise value-to-EBITDA (EV/EBITDA) ratio of 7.97X, significantly lower than the S&P 500's 17.45X and the sector's 9.37X [12]. Stocks to Watch - **FedEx (FDX)**: The company is focused on rewarding shareholders through dividends and buybacks, with a solid liquidity position and cost-cutting efforts driving its bottom line. FDX has surpassed earnings estimates in two of the last four quarters [16][17]. - **GXO Logistics (GXO)**: The company is enhancing its logistics capabilities, benefiting from increased e-commerce and automation. GXO has consistently surpassed earnings estimates, with shares rising 9.7% over the past year [19].

Core Insights - United Parcel Service (UPS) shares fell 10.57% to $90.84 following an earnings miss and a year-over-year revenue decline in Q2 2025 [1][2] - Although revenues of $21.2 billion exceeded expectations, they still represented a 2.7% decline year over year [3][10] - The company did not provide full-year guidance due to ongoing macroeconomic uncertainties [1] Financial Performance - Q2 2025 earnings per share were $1.55, missing the Zacks Consensus Estimate by a penny and declining 13.4% year over year [3][10] - Average daily volumes declined 3.8% year over year in the first half of 2025, attributed to weak consumer sentiment and tariff impacts [11] Market Position - Year-to-date, UPS shares have dropped 28%, underperforming the Zacks Transportation—Air Freight and Cargo industry's 16% decline [5][8] - Over the past year, UPS shares have decreased over 30%, while its industry and FedEx have seen declines of 21% and 22%, respectively [8] Challenges Facing UPS - The company is experiencing a demand slowdown due to declining shipping demand and lackluster online sales [11][12] - Concerns about dividend sustainability arise from an elevated payout ratio of 84%, with free cash flow barely covering dividend payments [13][15] Strategic Moves - UPS plans to reduce its workforce by 20,000, approximately 4% of its global workforce, and shut down 73 facilities to streamline operations [19][21] - The company has also agreed to cut Amazon volumes by more than 50% by June 2026, as Amazon was not considered its most profitable customer [21] Valuation - UPS is currently trading at a forward P/E of 11.99, lower than the industry average of 13.2 and FedEx [17] Investment Outlook - Despite attractive valuation and expansion efforts, near-term risks such as tariff uncertainties and declining earnings estimates suggest that buying UPS stock may be premature [19][22]

Group 1: Earnings Performance - United Parcel Service (UPS) reported quarterly earnings of $1.55 per share, missing the Zacks Consensus Estimate of $1.56 per share, and down from $1.79 per share a year ago, representing an earnings surprise of -0.64% [1] - UPS posted revenues of $21.22 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.77%, but down from $21.82 billion year-over-year [2] - Over the last four quarters, UPS has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Group 2: Stock Performance and Outlook - UPS shares have lost about 19.5% since the beginning of the year, contrasting with the S&P 500's gain of 8.6% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is $1.60 on $21 billion in revenues, and $7.05 on $87.34 billion in revenues for the current fiscal year [7] Group 3: Industry Context - The Transportation - Air Freight and Cargo industry, to which UPS belongs, is currently in the bottom 22% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that UPS's stock may underperform in the near future based on current estimates [5][6]

Core Insights - United Parcel Service (UPS) is expected to report Q2 2025 earnings of $1.56 per share, reflecting a 12.9% decrease year-over-year [1] - Revenue estimates for the same quarter are projected at $20.85 billion, indicating a 4.4% decline from the previous year [3] Financial Performance - UPS has a history of earnings surprises, with an average surprise of 2.42% across recent quarters [4] - The company's Earnings ESP is currently -1.00%, suggesting a lower likelihood of beating earnings estimates this quarter [9] Operational Challenges - Shipping volumes are anticipated to be negatively impacted by geopolitical uncertainties and high inflation [4] - Labor costs are expected to be high, prompting UPS to implement cost-cutting measures, including offering buyouts to delivery drivers for the first time [5] - UPS aims to reduce its workforce by 20,000, approximately 4% of its global workforce, and close 73 facilities to streamline operations [6] Customer Dynamics - UPS is reducing business with its largest customer, Amazon, which is expected to lower volume by over 50% by June 2026 [7] - The decision to cut ties with Amazon is partly due to the realization that it was not the most profitable customer for UPS [7] Market Conditions - Low fuel costs are projected to benefit UPS, with expenses expected to decrease by 10.3% from Q2 2024 [8] - However, weak demand and tariff risks continue to pose significant challenges to UPS's outlook [6] Stock Performance - UPS shares have declined by 26% over the past six months, underperforming the Zacks Transportation—Air Freight and Cargo industry's decline of 21.3% [11] - In terms of valuation, UPS shares are trading in line with the industry average based on the forward 12-month Price/Sales (P/S) ratio [13] Long-term Outlook - Despite current challenges, UPS has the brand and network to generate steady cash flows in the long run, making it a compelling long-term investment [19] - However, near-term headwinds and uncertainties surrounding trade policy and economic slowdown warrant caution for potential investors [19]

Core Insights - FedEx (FDX) and United Parcel Service (UPS) are leading global package delivery companies, each offering a variety of shipping services and logistics solutions [1][2] - The analysis aims to determine which company currently holds a competitive edge and represents a smarter investment opportunity [2] FedEx (FDX) Overview - FDX is focusing on cost-cutting measures due to declining package volumes, influenced by geopolitical uncertainties, tariffs, and high inflation [3][4] - The company has shelved its revenue and earnings forecast for fiscal 2026, following three consecutive quarters of lowered outlooks for fiscal 2025 [4] - FDX's DRIVE initiatives have resulted in savings of $2.2 billion in fiscal 2025 and $1.8 billion in fiscal 2024, with an expectation of $1 billion in transformation-related savings for fiscal 2026 [5] - In June 2025, FDX increased its quarterly dividend by 5.1% to $1.45 per share, and repurchased $3 billion worth of shares in fiscal 2025, returning a total of $4.3 billion to shareholders [6] - FDX's liquidity position is strong, with a current ratio of 1.19 at the end of fiscal 2025, indicating sufficient assets to cover short-term obligations [7] United Parcel Service (UPS) Overview - UPS is experiencing a decline in package volumes due to economic uncertainty and high labor costs, prompting the company to implement cost-cutting measures [8][9] - UPS plans to reduce its workforce by 20,000, approximately 4% of its global workforce, and shut down 73 facilities to streamline operations [10] - The company has agreed to reduce its business with Amazon by over 50% by June 2026, as Amazon was not its most profitable customer [12] - UPS announced a 0.6% increase in its quarterly dividend to $1.64 per share, but concerns about the sustainability of this dividend arise due to an elevated payout ratio of 84% [13] - UPS's long-term debt burden was $19.5 billion at the end of Q1 2025, with a long-term debt-to-capitalization ratio of 55.4%, higher than the industry average [14] Comparative Analysis - Year-to-date, UPS shares have declined by 18.8%, while FDX shares have decreased by 15.2%, indicating better performance for FDX [16] - In terms of valuation, UPS has a forward P/E ratio of 13.66, compared to FDX's 12.76, suggesting that UPS is more expensive relative to its earnings [19] - The Zacks Consensus Estimate predicts a 4.2% decline in UPS's 2025 sales and a 9.2% drop in earnings, while FDX is expected to see a 1.6% increase in revenues and a 1.3% growth in earnings for fiscal 2026 [23][24] - FDX is projected to have a higher earnings growth rate of 10.4% over the next five years compared to UPS's 7.4% [26] - Overall, FDX appears to be a more attractive investment option than UPS based on valuation, price performance, and financial leverage [26]

Core Viewpoint - United Parcel Service (UPS) is currently viewed as relatively overvalued, trading at a forward 12-month price to earnings (P/E) of 13.15X, which exceeds the industry average of 12.72X and is higher than rival FedEx Corporation (FDX) [1][10]. Financial Performance - UPS has maintained or increased its dividend each year since going public in 1999, currently offering a dividend yield of 6.6%, surpassing the industry average of 4.8% [5][6]. - The company has increased its dividend five times in the past five years, indicating strong year-over-year dividend growth potential [6]. - UPS's board approved a $5 billion share repurchase program in 2023, with $500 million worth of shares bought in 2024 and $1 billion in the first quarter of 2025 [7]. - UPS generated $6.3 billion in free cash flow in 2024, with $1.5 billion in the first quarter of 2025 [8]. Market Conditions - UPS is facing revenue weakness due to geopolitical uncertainty and high inflation, which negatively impact consumer sentiment and growth expectations [12]. - The decline in online sales in the U.S. and soft global manufacturing activity are contributing to reduced package shipment volumes [13]. - Labor costs are high due to agreements with the Teamsters union, which limits bottom-line growth [13]. - UPS anticipates a second-quarter adjusted operating margin of 9.3% and revenues of $21 billion, with a projected 9% decline in average daily volume for the U.S. Domestic segment [14]. Stock Performance - Year-to-date, UPS shares have underperformed, declining 26.8%, compared to a 24% drop in the industry and a 3.9% decline in rival GXO Logistics [15][18]. - Over the past 60 days, earnings estimates for UPS's second and third quarters of 2025 have decreased, indicating a negative trend in earnings expectations [19][20].

分组1 - FedEx reported quarterly earnings of $6.07 per share, exceeding the Zacks Consensus Estimate of $5.93 per share, and up from $5.41 per share a year ago, representing an earnings surprise of +2.36% [1] - The company posted revenues of $22.22 billion for the quarter ended May 2025, surpassing the Zacks Consensus Estimate by 2.24%, compared to year-ago revenues of $22.11 billion [2] - FedEx has surpassed consensus EPS estimates two times over the last four quarters and has topped consensus revenue estimates two times as well [2] 分组2 - The stock has underperformed the market, losing about 18.5% since the beginning of the year, while the S&P 500 has gained 2.4% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to those expectations [4] - The current consensus EPS estimate for the coming quarter is $4.05 on revenues of $21.63 billion, and $19.60 on revenues of $89.41 billion for the current fiscal year [7] 分组3 - The Zacks Industry Rank indicates that the Transportation - Air Freight and Cargo sector is currently in the top 40% of over 250 Zacks industries, suggesting a favorable outlook for stocks in this sector [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5] - The estimate revisions trend for FedEx was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6]

Company Overview - GXO Logistics (GXO) shares increased by 12.1% to close at $47.97, with notable trading volume compared to typical sessions, and a 5.8% gain over the past four weeks [1] - The company appointed Patrick Kelleher as the new CEO, who has 33 years of global supply chain experience, previously working with DHL Supply Chain [2] Financial Performance - GXO is expected to report quarterly earnings of $0.50 per share, reflecting a year-over-year decline of 9.1%, while revenues are projected to be $3.08 billion, an increase of 8.1% from the previous year [3] - The consensus EPS estimate for GXO has been revised slightly higher in the last 30 days, indicating a potential for price appreciation [4] Industry Context - GXO operates within the Zacks Transportation - Air Freight and Cargo industry, where FedEx (FDX) also operates, closing 1.2% higher at $226.04, with a 2.1% return over the past month [4] - FedEx's consensus EPS estimate has decreased by 1.3% to $5.94, representing a year-over-year increase of 9.8%, and currently holds a Zacks Rank of 4 (Sell) [5]