Al Root

Logistics is the lifeblood of the economy, which is one reason investors look to FedEx results as a kind of blood test for diagnosing overall economic health.

The shipper reports its fiscal third-quarter earnings on Thursday evening. Recent events, however, will make getting a complete picture of health a little more complicated.

"Severe weather, delayed China data sets, and escalating macro/policy uncertainty provide an interesting set-up," wrote Evercore ISI analyst Jonathan Chappell in a preview report. The December peak season was strong, but January and February included wildfire in L.A., lousy winter weather, an early Lunar New Year, and "even the material shift from Trump Bump euphoria to [tariff driven] recession fears by the end of February."

Any or all of that could impact results. Chappell is looking for quarterly earnings per share of $4.38, a little below the Wall Street consensus of $4.56, from sales of $21.9 billion.

A year ago, FedEx reported EPS of $3.86 from sales of $21.7 billion. Coming into the quarter, sales had fallen year over year in eight of the past nine quarters, illustrating how difficult the business has been lately.

With earnings up in the air, the reaction to the quarter might come down to guidance. In December, FedEx also cut its full-year earnings range to $19 to $20 a share in fiscal year 2025, from $20 to $21 a share.

Wall Street currently projects $18.49, according to FactSet. Chappell projects $18.85 a share. He rates the stock Buy and has a $290 price target.

"As with much of transports, investors seem fearful of the potential impact of tariffs and increasingly concerned about downside risk to consumers and industrial activity," wrote Citi analyst Ariel Rosa in his preview report. "Our impression is that sentiment is heavily skewed to the downside."

Investors seem to expect bad news, which could actually be a positive if FedEx delivers reasonable results.

Rosa rates shares Buy and has a $317 price target for the stock.

Coming into Thursday trading, FedEx stock was down about 12% this year. Shares were up 0.1% in premarket trading Thursday at $247.31, while S&P 500 and Dow Jones Industrial Average futures were down 0.4% and 0.3%, respectively.

Write to Al Root at allen.root@dowjones.com

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March 20, 2025 07:21 ET (11:21 GMT)

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