FedEx Stock Slides: Challenges and Future Outlook for the Shipping Giant
FedEx shares have lost nearly a fifth of their value since the start of the year, and the shipping giant has now suspended its full-year forecast. The decision to omit a full-year sales or profit estimate for fiscal 2026 has caused the stock price to fall in extended trading on Tuesday.
The suspension of the forecast comes after FedEx has already cut its fiscal 2025 outlook three quarters in a row. For the first quarter of fiscal 2026, FedEx expects adjusted earnings of $3.40 to $4, which is below the analyst consensus compiled by Visible Alpha. The company is calling for revenue to be flat to up 2% year-over-year, which is better than the Street expected.
In its fourth quarter, FedEx reported revenue of $22.2 billion, up less than 1% year-over-year and above the analyst consensus. Adjusted net income of $1.46 billion, or $6.07 per share, rose from $1.34 billion, or $5.41 per share, in the year-ago quarter, also beating estimates.
The stock has seen its largest drop following President Trump's "Liberation Day" tariff announcement, amid concerns that shipping demand could take a hit if tariffs lead to a pullback in discretionary spending. On Saturday, FedEx also announced the death of its founder and former CEO Fred Smith at the age of 80.
Smith's Memphis, Tenn.-based company, then known as Federal Express, began with 186 deliveries on its first day of operations in 1973. Today, it delivers about 16 million packages per day.
Investors are now waiting to see how FedEx will navigate these challenges and whether it can regain the confidence of investors and customers alike.
Source: Investopedia
