Morgan Stanley Stays Bearish on FedEx Ahead of Q4 Results

On Monday, June 2, Morgan Stanley analyst Ravi Shanker reiterated a Sell rating on FedEx Corp. (NYSE:FDX), maintaining his $200 price target. His cautious stance stems from expectations that the company’s upcoming fiscal fourth-quarter results will fall short of Street estimates. The company is expected to report the results on June 24.

For the quarter, Shanker expects an adjusted EPS of $5.33, well below the current consensus of $5.99. He notes that the shortfall is driven by a combination of factors, including inflationary cost pressures, fewer operating days, and softness in B2B volumes, as well as ongoing tariff-related challenges.

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He also flags weaker-than-expected margin performance, especially in the Express and Freight divisions, despite efforts to improve revenue quality and pricing. While some of the company’s initiatives may help stabilize pricing, they are likely to be offset by lower volumes and the absence of a strong demand recovery.

Shanker acknowledges that temporary international surcharges may offer some near-term relief to export revenues, but believes their contribution to overall margins will be limited.

In his view, FedEx’s risk-reward remains skewed to the downside unless there is a material shift in demand trends or a clearer outlook from management. Investors are likely to focus closely on the upcoming forward guidance, which will be crucial in improving sentiment around the stock.

FedEx is an American multinational corporation that provides transportation, e-commerce, and business services to customers and businesses worldwide. Among other services, it is best known for its air delivery service, FedEx Express, which pioneered overnight delivery as its flagship service.

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