FedEx Corp (NYSE:FDX, ETR:FDX) is expected to report fiscal fourth quarter 2025 earnings below market expectations, according to analysts at UBS, as softer international demand and macro volatility weigh on results.
They project earnings per share of $5.80, down from their earlier forecast of $6.22 and below the consensus of $6.01.
Wall Street analysts on average expect FedEx to post revenue of $21.75 billion, down 1.6% year-over-year.
“We believe the backdrop for FedEx in Q4 fiscal 2025 was more volatile and likely somewhat weaker than expected in their international business relative to their commentary from the Q3 earnings call in March,” the analysts wrote.
“While it is difficult to translate a weaker international backdrop to FedEx earnings with precision, FedEx's margin and EPS performance typically shows meaningful sensitivity to changes in demand.”
Looking ahead, UBS has also revised its fiscal 2026 EPS estimate to $19 from $20.41, citing a muted macroeconomic backdrop and significantly reduced cost-saving contributions from the company’s efficiency initiatives.
The DRIVE program, which delivered $2.2 billion in cost savings in fiscal 2025, is expected to yield just $400 million in fiscal 2026. Meanwhile, most of the $2 billion in targeted savings from the company’s Network 2.0 initiative are not expected to materialize until fiscal 2027.
The firm now forecasts just 3% total revenue growth in fiscal 2026, with only modest margin improvement, 13 basis points at FedEx Express and 62 basis points at FedEx Freight.
UBS maintained its ‘Buy’ rating on the stock and sees considerable upside, but lowered its price target to $311 from $331 as a result of its revised estimates.
Shares of FedEx traded hands at $220 on Thursday afternoon, down almost 22% in the year to date.
FedEx is expected to report its Q4 earnings after US markets close on June 24.