FedEx Risks Mount As Tariff Pressure Remains: Analyst Warns Of Increased Reporting Complexity

Bank of America Securities analyst Ken Hoexter reiterated the Buy rating on FedEx Corporation (NYSE:FDX), lowering the price forecast from $272 to $270.

Hoexter noted that FedEx is progressing steadily on its structural cost initiatives, including Network 2.0, DRIVE, and Tri-Color.

However, international B2B volumes in F4Q25 faced headwinds.

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While March volumes were stable, April weakened and May saw sharp Trans-Pacific declines as customers relied on existing inventories and waited for tariff relief, the analyst writes.

Following the 90-day U.S.-China reprieve, FedEx estimates the de minimis tariff on Chinese retailers has dropped to ~50% from 168%, though reporting complexity has increased, and FedEx is now prioritizing capacity utilization over pricing.

Hoexter highlighted that FedEx has partnered with Amazon.com, Inc (NASDAQ:AMZN) to handle select large and heavy parcels, offering a cost advantage over UPS.

The deal will be financially beneficial for FedEx, with higher-than-average yields and weights in its domestic Ground segment.

The arrangement utilizes FedEx's nationwide capabilities for difficult deliveries, though Amazon will remain a smaller customer, the analyst writes.

The analyst lowered estimated EPS for 4Q25, FY25, and FY26 by 9%, 3%, and 1%, respectively, now projecting $5.55, $17.70, and $20.75. These were previously expected at $6.10, $18.25, and $20.90.

The price target now sits near the low end of the 12.5x–18.5x range due to macroeconomic pressures.

Price Action: FedEx shares are trading lower by 0.49% to $231.81 at last check Tuesday.

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