FedEx Corporation (NYSE: FDX) stock is in the spotlight on Friday, Dec. 19, 2025, after the parcel carrier posted a stronger-than-expected fiscal second quarter and raised the low end of its full-year profit outlook—while simultaneously warning that an unexpected, peak-season aircraft grounding could create a meaningful near-term earnings drag. [1]
At last check, FedEx shares were around $287, following a strong prior session and an after-hours move that kept the stock near recent highs as investors weighed “better business momentum” against “worse short-term costs.” [2]
What’s driving FedEx stock today
The core bullish catalyst is straightforward: FedEx delivered an earnings beat and tightened its narrative around execution, pointing to pricing discipline, improved yields, and ongoing structural cost reductions as its multi-year transformation continues. [3]
The complicating factor—and the reason the market reaction isn’t a simple “up and to the right” story—is a major operational disruption hitting at the worst possible moment: the grounding of MD‑11 cargo aircraft during peak holiday shipping season, forcing FedEx to replace capacity with outsourced trucks and aircraft at premium seasonal rates. [4]
In other words: FedEx just showed investors the turnaround engine is firing… but a surprise headwind is eating fuel right as the company hits the highway.
The headline risk: MD‑11 grounding costs and peak-season capacity
According to FedEx CFO John Dietrich, the company is planning for up to $175 million in unexpected costs across November and December tied to replacing lift that would have been carried by grounded MD‑11 freighters. Reuters reported that Dietrich broke that down as about $25 million in November and roughly $150 million in December, when shipping networks are typically tightest and most expensive to flex. [5]
Reuters also reported that the grounding followed a Nov. 4 crash of a Boeing MD‑11 cargo plane in Louisville, Kentucky, and that the FAA grounded the jets days later; FedEx had 28 MD‑11s in operation at the time. [6]
For investors, two timelines now matter as much as quarterly EPS:
- How long elevated replacement-transport costs persist (especially through peak season spillover into early January).
- When MD‑11 capacity returns in a normalized way.
On that second point, Reuters reported FedEx currently expects the MD‑11 fleet to return to service in its fiscal fourth quarter ending May 31, 2026. [7]
Just as importantly, management signaled the near-term hit is not hypothetical: Dietrich told analysts that earnings for the quarter ending Feb. 28, 2026 are expected to be lower than the quarter FedEx just reported, with MD‑11 costs and spin-off-related expenses among the drivers. [8]
Earnings recap: what FedEx reported and why it mattered
FedEx’s fiscal second quarter (ended Nov. 30, 2025) delivered both a beat and a storyline investors have been waiting to see sustained: pricing/yield strength plus structural cost actions outweighing a choppy macro backdrop. [9]
Key figures highlighted by Reuters:
- Adjusted profit:$1.14 billion, or $4.82 per share, up from $4.05 a year earlier. [10]
- Wall Street expectation (LSEG):$4.11 per share. [11]
FedEx also pointed to segment-level improvements, especially at Express, where results benefited from stronger yields in U.S. domestic and international priority products—though FedEx acknowledged offsets including wage pressures, global trade policy impacts, and the MD‑11 disruption. [12]
Reuters additionally reported FedEx cited traction with healthcare and automotive customers, healthier-margin business-to-business shipments, and preparations to serve demand linked to data center construction—a theme logistics investors increasingly treat as a multi-year freight tailwind. [13]
FedEx guidance: the “forecast” investors are trading on
FedEx’s updated outlook is the clearest piece of forward-looking signal on the tape today.
In its earnings release filed with the SEC and echoed in its newsroom statement, FedEx said it is now targeting:
- Revenue growth:5% to 6% year over year (previously 4% to 6%). [14]
- Diluted EPS of $14.80 to $16.00 before mark-to-market (MTM) retirement-plan accounting adjustments (up from $14.20 to $16.00). [15]
- Adjusted diluted EPS of $17.80 to $19.00 after also excluding items such as Freight spin-off costs, business optimization initiatives, fiscal year-end change costs, and an international regulatory matter (previously $17.20 to $19.00). [16]
FedEx also reduced its pension contribution forecast to $275 million (from “up to $400 million”). [17]
Two important nuances for readers tracking FedEx stock forecasts:
- FedEx said it cannot forecast fiscal 2026 MTM retirement-plan adjustments, and therefore isn’t providing a GAAP EPS outlook. [18]
- The $17.80–$19.00 range is the “cleaner” operational guide investors typically model, because it excludes several special items beyond MTM. [19]
Reuters noted the midpoint of FedEx’s updated annual profit forecast was above the Street’s average estimate (also compiled by LSEG). [20]
The Freight spin-off: timeline, ticker, and why it matters for FDX stock
The planned FedEx Freight separation remains one of the biggest medium-term catalysts for FedEx stock—and it’s not just background noise in today’s coverage.
FedEx reiterated it expects to execute the spin-off on June 1, 2026, in a tax-efficient manner for stockholders, with the standalone company listed on the NYSE under the ticker FDXF. FedEx Freight is also slated to hold an Investor Day on April 8, 2026 in New York City. [21]
Why does this matter for FDX shareholders right now?
- In the bullish case, the separation clarifies valuation: investors can price a pure-play parcel/logistics FedEx separately from the less-than-truckload (LTL) trucking business.
- In the cautious case, separation costs and execution complexity create noise in near-term profitability—especially when combined with the MD‑11 disruption.
FedEx disclosed that FedEx Freight incurred one-time spin-off-related costs of $152 million during the quarter, and also noted that Freight operating results decreased due to lower shipments and wage pressures (partially offset by yield). [22]
FedEx Freight fundamentals: soft volumes, weaker margin signals
The most pointed “inside baseball” on the Freight segment today came from logistics-focused outlet FreightWaves, which framed the unit as operating in an industrial slump.
FreightWaves reported that in the fiscal second quarter ended Nov. 30:
- Revenue fell 1.7% year over year to $2.14 billion
- Tonnage declined 2.8%, partially offset by a 1.1% increase in yield (revenue per hundredweight)
- Shipments fell 3.9% year over year [23]
FreightWaves also reported the unit’s adjusted operating ratio worsened year over year, and that FedEx Freight lowered its fiscal-year expectations, now projecting revenue to decline slightly year over year (where prior guidance implied a low-single-digit increase). [24]
This matters for FedEx stock because it reinforces a split-screen reality:
- The parcel / network transformation story is improving.
- The industrial-linked LTL story remains sluggish—one reason the market has been so focused on the spin-off as a value-unlocking event.
Analyst actions and price targets: what Wall Street is saying (Dec. 19)
While the company’s guidance is the anchor, analyst target changes help explain why FedEx stock has held up near recent highs despite the MD‑11 cost shock.
Notable published analyst updates include:
- Stephens maintained an Overweight rating and raised its target price to $330 from $260, according to MarketScreener’s roundup posted early Friday. [25]
- Barclays raised its price target to $360 from $320 and kept an Overweight rating, according to TheFly via TipRanks. Barclays also flagged the risk that weak industrial growth and travel-demand volatility could persist into 2026—making “company-specific” execution stories more attractive. [26]
For broader context on sentiment going into earnings, a Reuters/Refinitiv note carried by TradingView said 19 of 30 brokerages rated FedEx stock “buy” or higher (with a median target price around the mid‑$200s, per LSEG-compiled data at the time), and highlighted Deutsche Bank lifting its target to $322 while maintaining a “buy” rating. [27]
The bigger picture: why FedEx is still a macro barometer (and why that’s tricky)
FedEx and UPS are often treated as “real economy” read-throughs because they touch so many industries and geographies. Reuters explicitly described the carriers as barometers of the global economy, and also pointed to ongoing industrial weakness as a headwind to business-to-business shipping volumes. [28]
That macro sensitivity is a double-edged sword for FedEx stock forecasts:
- If industrial activity stabilizes and global trade friction eases, FedEx’s yield discipline and network optimization could translate into stronger operating leverage.
- If manufacturing stays weak and trade policy uncertainty persists, FedEx may need to lean harder on price, mix, and cost actions to keep profit expanding.
FedEx’s SEC filing underscored this uncertainty in its own way, noting that its forecasts assume the current economic outlook and no additional adverse economic, geopolitical, or international trade-related developments. [29]
What to watch next for FedEx stock (FDX)
For investors following FedEx stock news after today’s headlines, the next catalysts are unusually concrete:
MD‑11 update cadence
Any change in inspection timing, staged returns to service, or incremental peak-season costs could move near-term earnings expectations quickly—especially as December replacement lift costs flow through results. [30]
Quarter ending Feb. 28, 2026
Management has already cautioned this quarter’s earnings will be pressured by MD‑11 and separation-related costs, making forward commentary on pricing and demand even more critical than the headline EPS beat. [31]
Freight spin-off milestones
Watch for disclosures tied to the April 8, 2026 Investor Day and any incremental details on governance, capital structure, and separation mechanics ahead of the June 1, 2026 target date. [32]
Transformation math: cost-out vs. disruption risk
FedEx reaffirmed $1 billion in permanent cost reductions tied to transformation-related savings and “Network 2.0” progress, alongside $4.5 billion in capex focused on network optimization and efficiency. Investors will continue to measure whether savings are arriving on schedule without creating service issues that erode yield. [33]
Bottom line
As of Dec. 19, 2025, the FedEx stock story is not a simple earnings-pop headline. It’s a high-stakes balancing act:
- Bull case: The turnaround is gaining traction, guidance is moving higher, and the planned Freight spin-off remains on track—potentially sharpening the valuation story for FedEx’s core parcel network. [34]
- Bear case (near term): A grounded cargo fleet during peak season is an expensive problem, and the costs are front-loaded right into December—when logistics networks are least forgiving. [35]
References
1. www.reuters.com, 2. www.investing.com, 3. www.reuters.com, 4. www.reuters.com, 5. www.reuters.com, 6. www.reuters.com, 7. www.reuters.com, 8. www.reuters.com, 9. newsroom.fedex.com, 10. www.reuters.com, 11. www.reuters.com, 12. newsroom.fedex.com, 13. www.reuters.com, 14. www.sec.gov, 15. www.sec.gov, 16. www.sec.gov, 17. www.sec.gov, 18. www.sec.gov, 19. www.sec.gov, 20. www.reuters.com, 21. www.sec.gov, 22. newsroom.fedex.com, 23. www.freightwaves.com, 24. www.freightwaves.com, 25. www.marketscreener.com, 26. www.tipranks.com, 27. www.tradingview.com, 28. www.reuters.com, 29. www.sec.gov, 30. www.reuters.com, 31. www.reuters.com, 32. www.sec.gov, 33. www.sec.gov, 34. www.sec.gov, 35. www.reuters.com
