Goldman Sachs Adjusts FedEx Earnings Estimates Amid Challenges
Analyst Updates on FedEx
Recently, an analyst at Goldman Sachs, Jordan Alliger, made some noteworthy adjustments to the earnings estimates for FedEx Corporation (NASDAQ: FDX). With the anticipation of the third-quarter earnings report, set to be released soon, Alliger provided a more cautious view on the company’s financial outlook.
Revised Price Targets and Earnings Projections
Initially, FedEx was rated as a Buy with a price prediction of $328. However, this forecast has been lowered to $315. This decision reflects the ongoing challenges in the transportation sector.
Third-Quarter EPS Cuts
For the third quarter, Alliger has adjusted the earnings per share (EPS) estimates from $4.65 to $4.40. The adjustments are primarily due to logistical issues plaguing the less-than-truckload (LTL) segments, which are significantly affected by a sluggish industrial economy.
Long-Term Projections and B2B Impact
Beyond immediate adjustments, Alliger has reduced the fiscal year 2025 EPS estimates from $18.85 to $18.65, attributing this change to volume decreases in B2B parcel services, specifically those involving U.S. Priority and Ground Commercial deliveries. This trend is expected to continue into FY26, where EPS estimates have been lowered from $23.30 to $22.20.
Market Conditions Influencing FedEx
The adjustments mirror broader economic challenges, including uncertainty surrounding tariffs and the anticipated recovery timeline for both manufacturing and B2B sectors. Such factors have heightened concerns among investors and analysts alike, prompting a reassessment of FedEx’s growth trajectories.
Cost-Cutting Measures and Investor Confidence
Despite the downgrades, the analyst remains optimistic about FedEx’s initiatives to cut costs and invest in its LTL business. These measures are intended to enhance operational efficiency and provide the company with the leverage it needs to bounce back when the industrial sector begins to recover.
FDX has also seen some interest from investors looking to gain exposure through related exchange-traded funds (ETFs) such as iShares Trust iShares U.S. Transportation ETF (IYT) and ProShares Trust ProShares Supply Chain Logistics ETF (SUPL).
Current Stock Performance
As of the latest observations, shares of FedEx (FDX) are trading down 0.71%, settling at around $241.77. These fluctuating stock prices reflect the market’s responsiveness to the revised earnings expectations and the overarching economic climate.
Frequently Asked Questions
What drove Goldman Sachs to lower FedEx's earnings estimates?
The downgrade is primarily due to ongoing transportation challenges, particularly in the B2B sector, as influenced by industrial economic conditions and tariffs.
How much has the EPS estimate changed for FedEx?
Goldman Sachs has lowered the EPS estimate for FedEx’s third quarter from $4.65 to $4.40.
What are the future EPS projections for FedEx?
The fiscal year 2025 EPS estimates have been revised to $18.65, down from $18.85, with similar reductions for future years.
Are there any ETFs where investors can gain exposure to FedEx?
Yes, investors can consider ETFs like the iShares U.S. Transportation ETF (IYT) and ProShares Supply Chain Logistics ETF (SUPL) for exposure to FedEx.
What is the current stock price for FedEx?
As of the latest update, FedEx shares are priced at approximately $241.77, reflecting a decline of 0.71%.
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