Guidance Reflects Transition Costs; Service Improvement Critical to Upside

Research evidence excerpt

Guidance Reflects Transition Costs; Service Improvement Critical to Upside

June 26, 2026 | 00:34 ET~

FedEx Freight

FDXF-NYSE Rating Price: Jun-25 Target ↑ Total Rtn Transportation

Market Perform $158.53 $150.00 -5%

Fadi Chamoun, CFA Analyst

fadi.chamoun@bmo.com (416) 359-6775

Fred Kornachev Senior Associate

Guidance Reflects Transition Costs; Service fred.kornachev@bmo.com (437) 335-0049

Amanda Abraham, CFA Senior AssociateImprovement Critical to Upside

amanda.abraham@bmo.com (416) 816-9139

Bottom Line: Legal Entity: BMO Nesbitt Burns Inc.

FDXF’s Q4/F26 update was generally in line with our expectations. Guidance for the

2YR Price Volume Chart

seven-month period ending December 31, 2026, as the company transitions to a 200

calendar year-end, is 7% below our forecast at the midpoint of the EBIT range and in 190

line on revenue. Transition costs associated with the separation from FedEx are likely 180

affecting near-term profitability and should ease into CY2027. Our initiation report 170 87

160 65provides a deep dive (link here). Our estimates are tweaked modestly; target price 4

raised to $150. We maintain our Market Perform rating. 150 321

140 0

Jun

Key Points LHS: Price ($) / RHS: Volume (mm) Source: FactSet

Company Data in $

FDXF reported results for Q4/F26 ended May 30 were generally in line with

Dividend $0.00 Shares O/S (mm) 148.9expectations and the company's guidance. Shipments/day increased 11.6% q/q

(down 5.9% y/y), which we characterize as consistent with the historical average Yield 0.0% Market Cap (mm) $23,607

for the period. Weight/shipment increased 3% led by a 9.4% increase in Economy AD Vol. (mm) 1.22 Net Debt (mm) $4,189

weight/shipment, which underpinned an 11.5% increase in revenue/shipment including BMO Estimates in $

fuel.