FedEx represents compelling exposure to global e‑commerce, cross‑border trade, and supply‑chain re‑shoring. Its integrated global network is difficult and expensive for new entrants to replicate. Meanwhile, the company is successfully converting modest top‑line growth into outsized earnings gains via cost efficiencies.
The stock also provides an attractive and growing dividend coupled with high‑single‑digit revenue growth, mid‑teens earnings growth from a company that’s still early in a multi‑year cost‑takeout and network rationalization cycle.
The stock trades at a reasonable 18.9 times the company’s forward earnings forecast with the planned spinoff set to make the business even more efficient over time.
FEDEX CORP. (New York symbol FDX; www.fedex.com) delivers packages and documents in the U.S. and 220 other countries.
FedEx has two main businesses: FedEx Express (including air freight and ground delivery), supplying 91% of its revenue and 95% of its earnings in the latest fiscal quarter; and FedEx Freight, which ships a variety of products by truck (9%, 5%).
On June 1, 2026, the company will spin off its FedEx Freight division (9% of total revenue) as a separate company. As a standalone business, the new company will be North America’s largest provider of less-than-truckload (LTL) services, which consolidate shipments from multiple customers into a single vehicle. It operates a fleet of 30,000 vehicles across all 50 U.S. states, Canada and Mexico. The new firm also has 355 shipping terminals, including over 320 in the U.S.
FedEx has not yet announced the details, but the new shares will trade on the New York exchange under the “FDXF” symbol. The parent company will also retain a 19.9% stake in FedEx Freight, but plans to sell those shares within the first year.
Meantime, the parent company continues to benefit from its recently completed cost-cutting plan, called DRIVE. Under that plan, FedEx permanently retired older cargo airplanes, consolidated facilities, reduced routes and cut jobs. These moves cut $4.0 billion from its annual costs.
FedEx also recently launched a new plan called Network 2.0 that will improve the efficiency of its package delivery operations in the U.S. and Canada. This plan should save the company $2.0 billion annually by the end of 2027.
Online shopping volumes surged during the COVID-19 pandemic. As a result, the company’s overall revenue rose 11.4%, from $83.96 billion in 2021 to $93.51 billion in 2022 (fiscal years end May 31). In 2023, revenue fell 3.6% to $90.16 billion, and by another 2.7% to $87.69 billion in 2024. That’s largely due to customers shifting away from overnight air services to less-expensive ground delivery. However, revenue rebounded by 0.3% to $87.93 billion in 2025.
Thanks to the higher revenue, FedEx’s earnings before unusual items rose 12.6%, from $4.89 billion in 2021 to $5.50 billion in 2022. Due to fewer shares outstanding, per-share earnings gained 13.4%, from $18.17 to $20.61. However, earnings declined 27.4% to $14.96 a share (or a total of $3.84 billion) in 2023 as a result of rising costs, particularly for fuel. Thanks to savings from the DRIVE restructuring plan, earnings in 2024 rose 16.7% to $17.80 a share (or $4.48 billion). Overall earnings then dipped 1.1% in 2025, to $4.43 billion, while per-share earnings improved 2.2% to $18.19.
[ofie_ad]
FedEx posts double‑digit EPS growth
In FedEx’s fiscal 2026 third quarter, ended February 28, 2026, revenue rose 8.3%, to $24.00 billion from $22.16 billion a year earlier. That topped the consensus forecast of $23.48 billion.
The higher revenue is largely due to better demand for its priority delivery service in the U.S. and international markets.
FedEx also continues to benefit from a major restructuring plan, which included retiring older cargo airplanes, consolidating facilities, reducing routes and cutting jobs. These moves cut $4.0 billion from its annual costs.
If you exclude expenses related to that plan and other unusual items, FedEx’s earnings improved 15.6%, to $1.26 billion from $1.09 billion. Earnings per share rose 16.4%, to $5.25 from $4.51, on fewer shares outstanding. That also beat the consensus estimate of $4.09 a share.
In fiscal 2026, FedEx plans to spend $4.5 billion on upgrades to its facilities and new aircraft. It can comfortably afford those outlays. It ended the quarter with cash of $11.7 billion, while its long-term debt of $22.8 billion is a moderate 26% of its market cap.
For all of fiscal 2026, FedEx’s restructuring savings will probably lift its earnings by about 10% to $19.70 a share. The stock trades at a reasonable 18.9 times that estimate. The $5.80 dividend yields 1.6%. The company still has $1.29 billion remaining under its current repurchase authorization.
Recommendation in Wall Street Stock Forecaster: FedEx remains a buy for long-term gains.
