FedEx Shares Plunge 6% After Withdrawing Full-Year Forecast

FedEx Corporation's shares experienced a significant drop in premarket trading on Wednesday, declining nearly 6%. This downturn followed the company's decision to withdraw its full-year forecast, despite reporting better-than-expected earnings for the fourth quarter. The logistics giant, headquartered in Memphis, announced an earnings per share (EPS) of $6.07, surpassing analyst estimates by $0.11, and revenue of $22.2 billion, which exceeded consensus forecasts of $21.84 billion.

Despite the positive earnings report, investor sentiment turned negative as FedEx chose not to provide fiscal 2026 guidance and offered a disappointing outlook for the first quarter. The projected adjusted earnings for the first quarter, ranging from $3.40 to $4.00 per share, fell short of analyst expectations. This cautious stance from management indicates potential challenges ahead for the company.

FedEx's fourth-quarter performance showed adjusted earnings per share of $6.07, beating the consensus estimate of $5.96 by 4.59%. Revenue for the quarter reached $22.2 billion, representing less than 1% year-over-year growth but exceeding analyst projections of $21.84 billion. The company's adjusted net income rose to $1.46 billion from $1.34 billion in the prior-year quarter, demonstrating operational resilience despite challenging market conditions.

However, the positive earnings report was quickly overshadowed by management’s cautious stance on future performance. FedEx’s first-quarter fiscal 2026 adjusted earnings guidance of $3.40 to $4.00 per share fell below the consensus, signaling potential headwinds ahead. The company projected flat to 2% revenue growth year-over-year for the first quarter, which, while better than Street expectations, still reflects modest growth prospects in the current operating environment.

The decision to withhold full-year guidance represents a significant departure from standard practice and suggests management faces considerable uncertainty about business conditions. This marks the fourth consecutive quarter that FedEx has provided disappointing forward-looking commentary, having slashed its fiscal 2025 outlook three quarters in a row before ultimately suspending annual forecasts entirely.

FedEx shares closed Tuesday at $229.52 before plunging to $218.50 in premarket trading Wednesday, representing a 4.71% decline from the previous close. The stock has faced significant pressure throughout 2025, falling nearly 20% year-to-date. Recent analyst sentiment has turned increasingly bearish, with FedEx experiencing 20 negative EPS revisions compared to just one positive revision over the past 90 days. The stock’s underperformance is stark when compared to broader market indices, with FedEx posting a year-to-date return of -17.44% versus the S&P 500’s positive 3.58% gain. Over longer time horizons, the performance gap widens further, with FedEx’s one-year return of -8.56% trailing the S&P 500’s 11.83% advance.

The premarket decline comes amid broader concerns about trade policy impacts on shipping demand, particularly following recent tariff announcements that could dampen discretionary spending and reduce package volumes. With a trailing P/E ratio of 14.44 and forward P/E of 11.43, the stock appears attractively valued on traditional metrics, but investors remain focused on the company’s ability to navigate uncertain macroeconomic conditions and provide clearer visibility into future performance.