FedEx’s assessment was expected to be less favorable on Wall Street, but late Thursday the package-handling behemoth sent an even more dismal picture since it indicated headwinds resulting from economic uncertainties.
Following its fiscal third-quarter update, which presented a less clear picture ahead, FedEx’s shares (FDX) dropped 7.5% Friday as analysts cut their price expectations for the highly watched business.
In morning trading on the S&P 500, the stock was the biggest decliner.
Given the company’s sensitivity to an economic downturn, Loop Capital analyst Rick Paterson went farther and downgraded the stock to sell from hold.
“Be aware that FedEx is a really poor recession stock since thin Express margins amplify the earnings hit whenever there’s pressure on the top line,” Paterson said, as economists ratcheting up U.S. recession risk. “If things go South, it’s not one you wish to own.”
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Early Friday, thirteen of the more than thirty analysts providing FactSet coverage decreased their stock price predictions.
Evercore ISI analyst Jonathan Chappell said the degree of the company’s lowered earnings projection “was greater than expected,” cutting his price objective on FedEx’s (FDX) stock from $337 to $310.
From $22.33 a share, Chappell decreased his earnings projection for the company to $21.22 a share.
For FedEx, JPMorgan analyst Brian P. Ossenbeck lowered his price objective from $323 to $280. From $23.63 a share, his fiscal 2026 profit goal for FedEx dropped to $21.11 a share.
“Management had expected a stronger industrial economy in its original guidance, which has clearly not played out,” Ossenbeck stated in his research note headed “March Sadness Continues.”
“The FY26 guide was lowered more than expected and management observed that there would likely be no economic improvement in the first half of FY26, essentially the back half of calendar 2025,” Ossenbeck said.
While presenting a rather more positive assessment of FedEx’s situation, TD Cowen’s Jason Seidl cut his FedEx stock-price target to $310 from $337.
“FDX does not see significant improvement to the macroenvironment in the first fiscal half of ’26, though we notice management also did not indicate that the economy would slip into decline,” he said.
Since FedEx’s size makes it a bellwether for the logistics industry, analysts said other stocks in the sector could come under pressure on Friday including XPO Inc. (XPO), ArcBest Corp. (ARCB) and Old Dominion Freight Line Inc. (ODFL).
XPO declined 1.2%; ArcBest dropped 2.5%; Old Dominion climbed 0.3%.
Including Friday’s moves FedEx’s stock has fallen 19.1% in the year to date, while the S&P 500 SPX has fallen 4%.
