Should FedEx’s (FDX) Strong Quarter, Higher Guidance and Freight Spin-Off Plans Require Action From Investors?

• In December 2025, FedEx reported fiscal second-quarter 2026 results showing sales of US$23,469 million and net income of US$956 million, raised its full-year 2026 revenue growth guidance to 5%–6%, completed a US$3,775.61 million share buyback program, and filed a US$592.64 million ESOP-related shelf registration.
• At the same time, FedEx flagged roughly US$175 million in costs from the temporary grounding of its MD-11 fleet and confirmed plans to spin off FedEx Freight by June 1, 2026, underscoring both short-term disruption and longer-term portfolio reshaping.
• We’ll now consider how FedEx’s stronger-than-expected quarter and higher 2026 revenue guidance might influence this existing investment narrative.

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FedEx Investment Narrative Recap

To own FedEx, you need to believe its cost-cutting and network transformation can steadily lift earnings, even as global trade and industrial demand remain choppy. This quarter’s beat and higher 2026 revenue guidance support that thesis, while the FedEx Freight spin off by June 2026 still looks like the key near term catalyst. The MD 11 grounding adds a clear, but currently time bounded, profit headwind rather than a fundamental change to the story.

Among the latest announcements, the completion of the US$3,775.61 million share buyback stands out alongside the guidance upgrade. Together, they signal management’s confidence in FedEx’s earnings power as it works through separation costs for FedEx Freight and restructuring spend under DRIVE and Network 2.0. For investors watching the Freight spin off and associated execution risk, this combination of capital returns and operational progress frames how supportive or vulnerable the current equity story might be.

However, investors should also be aware that the costs and execution risk around separating FedEx Freight could...

Read the full narrative on FedEx (it's free!)

FedEx’s narrative projects $95.1 billion revenue and $5.2 billion earnings by 2028. This requires 2.6% yearly revenue growth and about a $1.1 billion earnings increase from $4.1 billion today.

Uncover how FedEx's forecasts yield a $275.14 fair value, a 5% downside to its current price.

Exploring Other Perspectives

Five members of the Simply Wall St Community value FedEx between US$275.14 and US$339.85 per share, highlighting very different return expectations. Set against this wide spread, the Freight spin off and related restructuring costs could prove pivotal to how the company’s earnings story actually unfolds, so it is worth weighing several of these viewpoints before forming your own.

Explore 5 other fair value estimates on FedEx - why the stock might be worth just $275.14!

Build Your Own FedEx Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your FedEx research is our analysis highlighting 5 key rewards and 1 important warning sign that could impact your investment decision.
• Our free FedEx research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate FedEx's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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