Federal Express Corp. (FDX): Accelerating through spin noise – reiterate Outperform, price target $397

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Federal Express Corp. (FDX): Accelerating through spin noise – reiterate Outperform, price target $397

David Vernon +1 917 344 8333 david.vernon@bernsteinsg.com 23 June 2026

DETAILS

FDX: We reach our one-year price target of $397 (previously $424) by using our NTM+1 EPS estimate of $21.81 (previously

$23.01) with a multiple of 15.0x (unchanged) (See Exhibit 3 for detail).

FDX reported a decent top / bottom line beat into elevated expectations, and delivered guidance that, while at first glance might

appear underwhelming, is actually pretty decent. We temper our out-year assumptions (ahead of company guide for calendar 29

but not as far ahead) and reiterate our Outperform rating.

FDX’s May quarter was decent. Top line beat by 4% and EPS beat by 6% (Exhibit 1) with Express adjusted EBIT about in

line (on Express revenue that beat consensus by 4% but opex that was elevated, even after adjusting out asset impairment

and business optimization / realignment costs, Exhibit 2). B2B actually drove the majority of revenue growth in the quarter,

with improvement across all 4 key verticals — healthcare, automotive, aerospace, and data centers — from a B2B perspective,

as well as some momentum apparently seen even outside of those verticals. AI and data centers, especially out of Asia, were

highlighted as some key sources of momentum in FDX’s B2B business. All in all, this was “the brightest quarter within the

fiscal year from a B2B perspective” (earnings call commentary) alongside high customer retention rates / growth in profitable

market share. Evidence of the company’s effort to successfully lean into higher-yielding volume can be found in Express yield

performance this quarter, with beats to estimates in both Domestic and International RPPs, landing aggregate Express RPP

(i.e.