On Tuesday, Wolfe Research adjusted its outlook on FedEx Corporation (NYSE:FDX), reducing the price target from $347.00 to $337.00. Despite the downward revision, the firm reaffirmed its Outperform rating on the logistics giant's shares.
The adjustment comes as the research firm updates its model in anticipation of FedEx's third-quarter earnings report scheduled for March 21. The revised model reflects expectations of decreased margins in the company's Express and Less-Than-Truckload (LTL) segments. These are somewhat balanced by improved margins in the Ground segment. Consequently, the firm has lowered its third-quarter earnings per share (EPS) estimate from $3.45 to $3.25.
Wolfe Research highlighted that the revised EPS estimate now stands 8% below the consensus. Additionally, the analysis has also revised its fourth-quarter EPS forecast, leading to a reduction in the full-year fiscal 2024 EPS estimate from $17.75 to $17.20. This updated projection hovers near the lower end of FedEx's own guidance range of $17.00 to $18.50.
The firm's recent buy-side poll indicates that market expectations are tempered, with 70% of respondents anticipating that FedEx will miss earnings targets. Furthermore, 67% expect that the Express segment's margins will be flat or experience a decline for the quarter.
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