Why Is FedEx Stock Dipping Nearly 2% Premarket Today?
JPMorgan analyst Brian Ossenbeck warned that the company’s full-year earnings forecast is at risk.
FedEx stock (FDX) fell nearly 2% in premarket trading on Wednesday after JPMorgan Chase & Co. downgraded the stock to ‘Neutral’ from ‘Overweight’ on risks to its annual forecast.
According to TheFly, JPMorgan analyst Brian Ossenbeck also slashed the price target of the parcel delivery giant to $274 from $284. The new price target implies an upside of 13.1% as per its closing price on Tuesday. The stock has a consensus price target of $266.39, according to data from Fiscal.ai.
The brokerage noted that its recent channel checks in the less-than-truckload industry warrant a lower multiple in its sum-of-the-parts analysis for FedEx’s freight segment. JPMorgan was also concerned that the company’s full-year earnings forecast is at risk as it accounts for a rebound in freight fundamentals.
The high cost of separating the freight segment and the recent operational underperformance will likely weigh on the less-than-truckload multiple following the spinoff, the brokerage reportedly said.
Retail sentiment on Stocktwits about FedEx lingered in the ‘bearish’ territory at the time of writing.
FedEx and its peer UPS are reeling from the Trump administration’s dynamic tariff policy, which has impacted demand in some areas. They have also taken a hit as the Trump administration has moved to end the de minimis exemption. This trade policy allowed low-value imported goods valued at less than $800 to enter the United States without companies having to pay customs duties or taxes.
The company forecast fiscal 2026 adjusted earnings between $17.20 and $19.00 per share, which is slightly below analysts’ expectations as of September. The company also stated that it anticipates incurring a $1 billion loss due to global trade uncertainty, with $300 million attributed to expenses such as customs clearance costs. However, it saw strong demand in domestic package deliveries.
FedEx stock has fallen nearly 14% this month.
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