Jonathan Chappell, a top Evercore analyst, downgraded FedEx (FDX) stock to Hold from Buy ahead of the delivery giant’s results for the first quarter of Fiscal 2026 on September 18. Chappell lowered his price target to $243 from $249, citing “ongoing demand headwinds,” which are expected to impact near-term earnings per share (EPS) estimates.
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Wall Street expects FedEx to report earnings per share (EPS) of $3.64, reflecting a 1.1% year-over-year growth. Meanwhile, revenue is projected to come in at $21.7 billion, reflecting a 0.4% increase compared to the prior-year quarter. Despite muted revenue growth, FedEx’s earnings are expected to rise due to the company’s aggressive cost reduction initiatives.
Top Evercore Analyst Moves to the Sidelines on FDX Stock
Chappell highlighted that, according to Evercore’s monthly proprietary parcel macro correlations data, August numbers were worse than expected, particularly for industrial production and retail sales. Based on these data points, the 5-star analyst lowered his Fiscal 2026 EPS estimate to $17.99 from $19.16.
Furthermore, Chappell contended that the macro correlations data missed the incremental pressure from the global removal of de minimis exemptions and the persistent volume challenges at FDX Freight. The de minimis exemption allowed goods valued under $800 to enter the U.S. without paying duties or taxes, and with expedited clearance. However, the U.S. government ended this exemption on August 29. Consequently, even small shipments, regardless of their value or origin, are now subject to import duties, taxes, and fees.
That said, the analyst believes that FedEx can mitigate some of these headwinds with the restructuring efforts under its Network 2.0 initiative, although cost efficiencies are likely to be seen in the second half of the year. FedEx’s Network 2.0 initiative is a multi-year effort to streamline its pickup, transport, and delivery operations.
However, Chappell remains cautious as he believes that with increasing volume and revenue pressures, the company’s productivity enhancements alone will not be enough to fully offset macro headwinds. He sees modest upside in FDX stock over the near term, particularly if estimates continue to move lower. Even after considering the FDX Freight split next year, Chappell sees only 11% upside, with still nine months remaining until execution.
Is FDX Stock a Buy, Sell, or Hold?
Heading into Q1 FY26 earnings, Wall Street has a Moderate Buy consensus rating on FedEx stock based on 15 Buys, five Holds, and two Sell recommendations. The average FDX stock price target of $266.32 indicates about 17% upside potential from current levels. FDX stock has declined about 18% year-to-date.
