FedEx Delivers Biggest Profitable US Share Gains In Two Decades

FedEx Corp. (NYSE:FDX) delivered its strongest U.S. market-share gains in more than two decades and hiked its fiscal 2026 earnings outlook. On Friday, Bank of America Securities (BofA) reiterated a Buy rating and raised its price forecast from $431 to $440. The adjustment follows a robust third-quarter performance characterized by significant domestic expansion and network optimization. Historic Market Share Gains and Earnings Beat FedEx reported adjusted earnings per share (EPS) of $5.25. This figure climbed 16% year-over-year. It comfortably cleared the Street estimate of $4.17. Chief Customer Officer Brie Carere noted the company achieved its strongest quarter of profitable U.S. market-share gains in over 20 years. BofA analyst Ken Hoexter attributed the beat primarily to the Federal Express segment. This division contributed a 76 cents per share upside. Disciplined business-to-business (B2B) growth and successful cross-selling of bundled offerings drove these results. Guidance Lifted on Network Transformation Management raised the midpoint of its fiscal 2026 EPS guidance by 7%. The new range sits at $19.30 to $20.10. CEO Raj Subramaniam highlighted that peak season execution benefited from the “Network 2.0” rollout. FedEx expects 35% of eligible volume to flow through 400 optimized facilities this month. This figure should reach 65% by the next peak season. The company anticipates over $1 billion in transformation-related cost savings for fiscal 2026. Express Strength Offsets Freight Weakness While Federal Express saw operating income rise 18%, the Freight segment lagged. FedEx Freight reported operating income of $134 million. This was down 49% year-over-year. CFO John Dietrich noted the segment incurred $60 million in separation-related costs. These expenses relate to the planned spin-off of the unit. FedEx intends to spin 80.1% of FedEx Freight to shareholders by June 1. Analyst Outlook and Valuation BofA maintains FedEx as a “top pick.” The new $440 price forecast is based on 19.5 times the firm’s fiscal 2027 EPS estimate. FDX Price Action: FedEx shares were up 1.77% at $362.43 at the time of publication on Friday, according to Benzinga Pro data. Photo via Shutterstock