FDX Earnings: FedEx Surges despite Mixed Results

Shares of delivery services company FedEx (FDX) surged 10% in after-hours trading after the company reported earnings for its second quarter of Fiscal Year 2025. Earnings per share came in at $4.05, which beat analysts’ consensus estimate of $4.01 per share. However, sales decreased by 0.9% year-over-year, with revenue hitting $22 billion. This missed analysts’ expectations of $22.14 billion but did not seem to bother investors much.

In addition, during the second quarter, FDX bought back $1 billion worth of shares. The firm has regularly repurchased its shares in each of the most recent quarters (as demonstrated in the image below) and has $3.1 billion remaining under its buyback plan.

2025 Outlook

Looking forward, management now expects revenue growth in FY 2025 to be flat compared to previous expectations of low-single-digit percentage growth. Furthermore, adjusted earnings per share are anticipated to land between $19 and $20. For reference, analysts were expecting an adjusted EPS of $19.48. FedEx also expects to repurchase an additional $500 million worth of stock during the remainder of its fiscal year for a total of $2.5 billion.

Although today’s results and guidance were not exactly stellar compared to expectations, shares likely rallied because they fell going into earnings. This suggests that investors were likely pricing in a worse scenario than what they got.

Is FedEx a Buy, Sell, or Hold?

Turning to Wall Street, analysts have a Moderate Buy consensus rating on FDX stock based on 14 Buys, eight Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 14% rally in its share price over the past year, the average FDX price target of $309.58 per share implies 12.1% upside potential. However, it’s worth noting that estimates will likely change following today’s earnings report.

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