To The Moon

$FedEx(FDX)$ is scheduled to report its fiscal Q1 2026 earnings after the market closes on Thursday, September 18, 2025.

Earnings Per Share (EPS) and Revenue: The consensus analyst estimate is for EPS of around $3.68 on revenue of approximately $21.8 billion. While a beat or miss on these numbers is a primary driver, investors should also focus on the quality of the earnings.

Here is an analysis of what investors should look for and potential short-term trading opportunities.

Based on its fiscal Q4 2025 earnings report, FedEx (FDX) delivered a mixed performance, showcasing the effectiveness of its cost-cutting measures while also highlighting persistent weakness in the global demand environment.

Q4 2025 Earnings Summary

Financial Beat: FedEx surpassed analyst expectations, reporting a 1% year-over-year revenue increase to $22.2 billion and an adjusted diluted EPS of $6.07, which was a beat on the consensus estimate.

Cost Management Success: The company's "DRIVE" cost-reduction program was a major factor, helping to expand its adjusted operating margin and drive an 8% increase in adjusted operating income. Management noted that it achieved its fiscal 2025 cost reduction target and delivered a cumulative $4.0 billion in savings since fiscal year 2023.

Segment Performance: The Express segment showed improvement, driven by cost benefits and higher international export volume. However, the Freight and Ground segments faced challenges, with operating income declining in the Freight division.

Capital Allocation: FedEx's commitment to shareholder returns was evident as it returned approximately $4.3 billion to stockholders through share repurchases and dividends in fiscal 2025.

Lesson Learned from Guidance

The key lesson from FedEx's Q1 2026 guidance is the discrepancy between internal cost-cutting efforts and the external macroeconomic environment. Despite a strong Q4 performance, the company provided a cautious outlook for the upcoming quarter, forecasting a flat to 2% revenue growth rate and an adjusted EPS of $3.40 to $4.00, which was below analyst expectations.

This tempered guidance reveals that:

Macroeconomic Headwinds Persist: Management is still grappling with a "challenging global demand environment," citing headwinds from ongoing trade policy uncertainty and a weak industrial economy. The company's profitability and volume are still vulnerable to these external factors.

Transformation Is a Long-Term Play: While the "DRIVE" program has been highly successful, the benefits are being partially offset by a difficult market. The guidance suggests that the company's transformation is a multi-year effort and that investors should not expect a quick fix for underlying demand issues.

In short, the Q4 earnings report demonstrated FedEx's operational resilience and its ability to improve profitability in a tough market. However, the cautious guidance serves as a reminder that the company's future performance is tied to broader economic trends, and its internal transformation efforts, while effective, cannot completely insulate it from these challenges.

Key Metrics to Watch

Operating Margin and Cost-Cutting: A major focus for FedEx has been its "DRIVE" cost-reduction program, which aims to improve profitability. Investors will be scrutinizing operating margins across the different segments (Express, Ground, and Freight) to see if these initiatives are translating into tangible savings. Any commentary from management on the progress and future targets of this program will be highly influential.

Segment Performance: The performance of the Express segment, FedEx's largest, is particularly important. Weak global demand and tariff-related tensions have been headwinds. Investors will be looking for signs of stabilization or improvement in volume and pricing trends, especially for international air freight.

E-commerce and B2B Trends: The earnings call will provide insight into the broader economic picture, specifically e-commerce and business-to-business (B2B) shipping trends. Any comments on consumer demand and corporate spending will be critical for understanding the company's outlook.

Guidance for Fiscal Year 2026: The most important factor for the stock's future direction will be the company's guidance for the rest of fiscal year 2026. A strong outlook, particularly in an environment of economic uncertainty, could signal that the company's cost-cutting efforts are paying off and that a recovery is on the horizon.

FedEx (FDX) Price Target

Based on 26 analysts from Tiger offering 12 month price targets for FedEx in the last 3 months. The average price target is $261.77 with a high forecast of $320.00 and a low forecast of $200.00. The average price target represents a 14.96% change from the last price of $227.70.

Potential Short-Term Trading Opportunities

Volatility: FedEx has a history of significant stock price swings following earnings reports, often reacting negatively. This volatility creates opportunities for short-term traders.

FedEx Corporation (FDX) had 30-Day Historical Volatility (Close-to-Close) of 0.2758 for 2025-09-15.

Positive Surprise: A beat on key metrics, coupled with a strong outlook for 2026, could lead to a sharp rally. This might be a momentum trading opportunity, but given the stock's historical negative reaction to earnings, it's a high-risk trade.

Negative Surprise: A miss on earnings or, more importantly, a downward revision of guidance, could lead to a significant sell-off. This could present a shorting opportunity, as the market could punish the stock for a weak outlook.

Options: For those comfortable with the risks, options trading could be a way to capitalize on the expected volatility. A long straddle or strangle could be used to profit from a large move in either direction, but these strategies are highly dependent on implied volatility, which is typically elevated going into earnings.

Technical Analysis - Exponential Moving Average (EMA)

We are seeing FDX continue its positive momentum while trading in sideways with possible consolidation, we can see that the bears are still in control and FDX need to show a more confirmed internal cost-cutting, especially with the external macroeconomic environment affecting it as seen in the guidance for Q1 2026 given in the previous earnings call.

We need FDX to show that there is potential revenue growth to increase and not coming in flat, and investors might need to watch how the Fedex management planned to overcome the "challenging global demand environment," citing headwinds from ongoing trade policy uncertainty and a weak industrial economy.

Summary

FedEx (FDX) is set to report its fiscal Q1 2026 earnings, with a focus on whether its "DRIVE" cost-cutting initiatives can offset a still-challenging global economic environment. Analysts project an EPS of $3.68 on revenue of $21.8 billion.

Key metrics to watch include the operating margins of its segments, particularly the largest Express division, to see if efficiency gains are translating to profitability. Investors will also scrutinize commentary on global demand, as well as e-commerce and B2B shipping trends.

The most critical factor will be management's outlook for fiscal year 2026. A strong guidance would signal that the company's internal transformation is gaining momentum despite external headwinds, potentially leading to a stock rally. Conversely, a conservative outlook could cause a sell-off, as it would underscore ongoing macroeconomic challenges and suggest that the company's turnaround is a multi-year effort. The stock's post-earnings movement is likely to be volatile, presenting opportunities for short-term traders.

Appreciate if you could share your thoughts in the comment section whether you think Fedex could show signs of revenue growth coming and the management have solid plan to overcome the external headwinds like the trade policy uncertainty and also the possible weak industrial economy.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.