FedEx Stock Slips on J.P. Morgan Downgrade Over Freight Business
Analysts cite a weakening outlook for the freight market and potential risks to the company's 2026 profit targets for the move to 'Neutral'.
FedEx Corp. (FDX) shares traded lower after J.P. Morgan , citing growing concerns over the company's freight business. The bank also trimmed its price target on the logistics giant, reflecting a more cautious stance on its near-term earnings potential.
The downgrade was driven by J.P. Morgan's view that a sustained recovery in the less-than-truckload (LTL) market may not unfold as the company anticipates. Analyst Brian Ossenbeck noted that the bank's recent channel checks pointed to a weaker outlook, raising red flags about potential . This has created a more challenging environment for FedEx's Freight segment, a key component of its overall business.
"The downgrade is based on our recent channel checks across the less-than-truckload (LTL) industry, which results in a lower multiple in our sum-of-the-parts analysis for Freight," J.P. Morgan stated in its note to clients. The firm expressed concern that FedEx's full-year guidance, which assumes a rebound in freight fundamentals, could be at risk if market conditions do not improve.
Adding to the pressures are broader industry challenges, including reports that while competitors continue to introduce new capacity. Internally, FedEx also faces significant costs related to the planned separation of its Freight segment, which could weigh on performance after the spin-off is complete.
Despite the downgrade, FedEx has maintained its adjusted full-year earnings forecast of between $17.20 and $19.00 per share. However, J.P. Morgan's revised outlook suggests the path to achieving these targets has become more difficult, as the company navigates both structural headwinds and a potentially softening freight market.