FedEx (NYSE: FDX) recently reported its financial results for the third quarter of fiscal year 2025, revealing a 2.3% year-over-year increase in revenue to $22.2 billion and a 16.8% rise in earnings per share (EPS) to $4.51, Forbes reports.
However, these figures fell slightly short of Wall Street expectations, which had projected $4.57 EPS on $21.9 billion in revenue.
Adding to investor concerns, FedEx lowered its full-year adjusted EPS forecast from its previous range of $19.00–$20.00 to a more conservative $18.00–$18.60. Following this announcement, FedEx stock declined, reflecting market disappointment and broader economic concerns.
Beyond FedEx’s earnings, broader economic challenges are weighing on its stock performance. Rising geopolitical tensions, trade policy shifts, and ongoing inflationary pressures have created an unpredictable market environment.
As a logistics and transportation giant, FedEx’s performance is closely tied to global trade and industrial activity, making it more vulnerable during economic downturns. Historically, during major recessions and market crashes, FedEx stock has suffered significant declines, at times falling by as much as 45% over a few quarters.
Given the current uncertainties, some analysts suggest that FDX stock could potentially decline to $150 per share if economic conditions worsen.
FedEx’s stock has experienced sharp declines in previous economic downturns:
- Inflation Shock (2022): Fell 46.1% from $264.91 in January to $142.90 in September before recovering.
- COVID-19 Pandemic (2020): Declined 45.1% from $164.91 in February to $90.49 in March but rebounded quickly.
- Global Financial Crisis (2008-2009): Plunged 68.1% from $107.51 to $34.28, taking nearly four years to recover.
These historical trends indicate that FDX stock is highly sensitive to economic slowdowns, reinforcing concerns about further declines.
Several key factors contribute to the uncertainty surrounding FedEx stock:
- Weaker Revenue Growth: FedEx’s annual revenue growth has averaged just 1.7% over the last three years, lagging behind the S&P 500’s 6.3%.
- Earnings Pressure: Adjusted earnings have declined by 15% since 2022, raising concerns about future profitability.
- Geopolitical Risks: Trade tensions, global conflicts, and changing US policy decisions add additional volatility to FedEx’s outlook.
- Stock Valuation: Despite recent underperformance, FedEx trades at a P/E ratio of 14.0, slightly above its three-year average of 13.0, which may indicate limited upside potential.
With FedEx’s stock already down 12% year-to-date (as of March 20, 2025) and economic uncertainty persisting, investors must weigh the risks carefully.
If macroeconomic conditions deteriorate, a drop toward $150 per share is a possibility. However, a soft economic landing or improved demand in global trade could help stabilize the stock.
For those considering investment options, diversified strategies with risk-focused portfolios may offer more stability compared to holding a single stock during volatile periods.
