The pandas arrived at Dulles airport near Washington on a FedEx cargo jet dubbed the 'Panda Express'
AFP

All eyes are on FedEx as the U.S. shipping giant prepares to unveil its fourth-quarter earnings later Tuesday. Market watchers expect a modest performance, with the company facing a challenging mix of weaker global trade volumes, tariff disruptions, and the pressure to maintain margins.

According to Investopedia, analysts are forecasting an adjusted earnings per share (EPS) of around $5.88, slightly up from the same period last year. However, revenue is likely to dip marginally to about $21.8 billion, reflecting lower international package demand and macroeconomic headwinds.

The results come amid heightened anticipation over the success of FedEx's multi-year cost efficiency plan—codenamed "DRIVE"—as well as its forthcoming spin-off of FedEx Freight, which is expected to unlock operational value in fiscal 2026.

In its preview, MarketWatch noted that while cost trimming has helped maintain profitability, tariffs and softer consumer activity continue to weigh on overall shipping volumes. Late-May data, however, hinted at some improvement in domestic parcel movement.

Wall Street remains cautiously optimistic. As reported by Investopedia, most analysts have maintained a "Buy" rating, with an average target of $281, reflecting over 20% upside potential. Still, investment banks like Morgan Stanley and BofA have flagged concerns over uneven volume recovery and persistent margin pressure.

The options market is pricing in a 7% post-earnings move, making FedEx one of the most closely watched stocks on Tuesday's trading docket. Traders expect the stock to trade between $213 and $245, based on current volatility forecasts.

Investors are also keen on any forward-looking comments from FedEx management regarding FY26 guidance, the impact of inflation, and potential capital expenditure cuts.

The earnings call is scheduled for later today after market hours. FedEx shares were up about 1.2% in pre-market trading, buoyed by broader market optimism following geopolitical developments in the Middle East.

Fedex