FDX - Domestic Progress with Lots to Fix Internationally

Research evidence excerpt

FDX - Domestic Progress with Lots to Fix Internationally

Airfreight & Surface Transportation

FLASH

FLASH: FEDEX CORP. (FDX) July 22, 2026

FDX - Domestic Progress with Lots to Fix Internationally Rating:

Outperform ●FDX Releases C24-C25 Financials. After the close yesterday, FDX released Price:

calendarized financials for C24-25 (nothing yet for 1H:26). The recast financials $315.19

also break out FEC into two new reporting segments - Express U.S. Domestic Price Target:

$390 (including Ground) and Express International. Several other changes were made

% Upside:

including moving some data and technology costs from Dataworks into U.S. 23.7%

Domestic, and Logistics moving from Corporate to International.

●FDX vs. UPS. FDX historically reported separate Ground and Express (domestic Source: FactSet, Wolfe Research

Priced as of 07/21/26

+ int'l combined) segment results on a fiscal calendar, while UPS reported U.S.

and Int'l segment results on a calendar basis. Going forward, segment reporting

for both FDX and UPS will now be directly comparable, which we believe will

lead to improved transparency and accountability for both companies. FDX

reported 8.4% Domestic margins in C25, 90bp improved y/y and 70bp better

than UPS's Domestic margins. We believe this U.S. margin gap is likely to widen Scott Group

further this year. However, FDX reported just 2.9% Int'l margins in C25, well sgroup@wolferesearch.com (646) 845-0721

below UPS's 15.8% Int'l margins. FDX's Int'l margins declined just 20bp y/y last View Scott’s Research

year vs. UPS's margins which declined nearly 300bp y/y. So, the margin gap has View FDX Model

narrowed modestly, but still has a long way to go. At its Analyst Day earlier this View Comp Table

year, FDX guided to 8% Int'l segment margins.