Raymond James Outperform Rating on FedEx (FDX) Ahead of FedEx Freight Spin-Off

Based on comprehensive research including analyst reports, SEC filings, and company disclosures, here is a detailed analysis of the investment thesis behind Raymond James’s Outperform rating on FedEx Corporation and the potential shareholder value impact from the upcoming corporate restructuring.

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Raymond James has maintained its

rating on FedEx stock while adjusting its price target to from $255, representing a significant increase of approximately 20% [1]. This price target revision reflects the analyst’s confidence in FedEx’s operational improvements and strategic initiatives. The consensus analyst rating for FedEx stands at , with 25 out of 48 analysts rating the stock as a Buy, 20 as Hold, and only 3 as Sell [2]. The consensus price target of $292.50 suggests modest downside from current levels around $308, though Raymond James’s target indicates above-average upside potential.

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FedEx Corporation announced in December 2024 that its Board of Directors approved the

, creating a new publicly traded company [3]. The spin-off is scheduled for , with the new company to be listed on the New York Stock Exchange under the ticker symbol [3].

Attribute	Details
Effective Date	June 1, 2026
Ticker Symbol	FDXF (NYSE)
Tax Treatment	Tax-free for U.S. stockholders
Retained Interest	FedEx Corp intends to retain up to 19.9% of FedEx Freight’s outstanding shares
Investor Day	Scheduled for April 8, 2026 in New York City

The transaction is designed to be

for FedEx stockholders, meaning investors will only owe capital gains taxes when they sell their new shares in the spin-off entity [4]. FedEx has submitted a confidential Form 10 to the SEC and requested a private letter ruling on the tax treatment from the IRS, with the Form 10 expected to be publicly available in January 2026 [3].

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FedEx Freight is a leading provider of

services, combining freight from multiple customers into single vehicles. The business profile includes:

Metric	Value
Annual Revenue	$9.4 billion (approximately 11% of FedEx’s total revenue)
Operating Income Contribution	Nearly 25% of FedEx’s operating income
Earnings Contribution	23% of total company earnings

• Vehicles
  : Over 30,000 vehicles in the fleet
• Daily Shipments
  : Average of 92,000 shipments per day
• Revenue Mix
  : 66% from priority shipments (fast delivery), 34% from slower, lower-priced shipments

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The spin-off is expected to unlock shareholder value by allowing

[4]:

• FedEx Corporation (remaining entity)
  : Will focus on air and ground courier services, leveraging its global network for package delivery
• FedEx Freight (new entity)
  : Can pursue LTL-specific strategies aligned with industry peers like Old Dominion Freight Line (ODFL), potentially receiving a
  higher valuation multiple
  in line with pure-play LTL carriers

FedEx Freight, as a standalone entity, could achieve valuation multiples comparable to specialized LTL carriers. Old Dominion Freight Line (ODFL) trades at a premium multiple due to its focused business model. By separating FedEx Freight, investors can more accurately value the LTL business without the “conglomerate discount” that often affects diversified companies [4].

The restructuring supports FedEx’s commitment to

:

Fiscal 2025 Capital Return	Amount
Total Returned to Investors	$4.3 billion
Share Buybacks	$3.0 billion
Shares Repurchased	Approximately 4.5% of shares outstanding
Impact on EPS	Added $0.44 per share to FY2025 earnings
Dividend Yield	2.4%

As of November 30, 2025,

under the company’s 2024 stock repurchase authorization [3].

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FedEx reported

for fiscal 2026, demonstrating the effectiveness of its strategic initiatives:

Metric	Q2 FY2026	Q2 FY2025	Change
Revenue	$23.5 billion	$22.0 billion	+7%
Operating Income	$1.61 billion (adjusted)	$1.38 billion (adjusted)	+17%
Operating Margin	6.9% (adjusted)	6.3% (adjusted)	+60 bps
Net Income	$1.14 billion (adjusted)	$0.99 billion (adjusted)	+15%
Diluted EPS	$4.82 (adjusted)	$4.05 (adjusted)	+19%
EPS Surprise	+16.99% vs. estimates	—	—

The company raised its full-year fiscal 2026 guidance, projecting

and adjusted EPS of (excluding spin-off costs and other items) [3].

The Federal Express segment showed significant improvement:

• U.S. domestic package revenue
  increased 12%, driven by 6% volume growth and 5% yield improvement
• U.S. Priority package volume
  rose 5%, with yields up 6%
• U.S. Ground commercial
  grew 11% in revenue

The

(launched in 2023) has achieved substantial cost reductions:

Cost Reduction Achievement	Amount
Total Annual Cost Reduction	$4.0 billion
FY2025 Savings	$2.2 billion
FY2026 Target Savings	Additional $1 billion
Impact on FY2026 EPS	Approximately $4.44 per share benefit

These savings come from retiring older aircraft, consolidating facilities, reducing routes, and workforce optimization [4].

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FedEx has provided the following fiscal 2026 guidance:

Metric	Forecast
Revenue Growth	5-6% year-over-year
Adjusted EPS (before special items)	$14.80 - $16.00
Adjusted EPS (excluding spin-off costs)	$17.80 - $19.00
Effective Tax Rate	~25% (before MTM adjustments)
Capital Spending	$4.5 billion
Pension Contributions	$275 million

The company expects

from transformation-related savings and the advancement of Network 2.0 [3].

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• FedEx Freight Performance
  : The LTL segment experienced a 71% decline in operating income in Q2 FY2026 due to lower shipments, higher wage rates, and spin-off preparation costs [3]
• Spin-Off Costs
  : Approximately $600 million in one-time costs related to the spin-off are expected in FY2026 [3]
• Global Trade Policy
  : The financial impact of global trade policy changes continues to affect international operations

• Successful completion of the spin-off with anticipated benefits
• Integration of cost-cutting initiatives without disrupting operations
• Achieving targeted Network 2.0 transformation benefits

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Metric	Current Value	Historical Context
P/E Ratio	17.27x	Near 2-year high
P/S Ratio	0.83x	Near 3-year high
P/B Ratio	2.66x	Near 3-year high
Forward P/E	12.4x (FY2026 estimate)	Attractive valuation
Free Cash Flow Yield	~6%	Solid
ROE	15.67%	Healthy

The stock trades at a

, which appears attractive given the company’s growth catalysts and restructuring benefits [4].

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Raymond James’s

on FedEx is underpinned by several key factors:

1. Strategic Clarity
   : The FedEx Freight spin-off will create two focused entities, each with clearer growth strategies and potentially higher valuations

2. Operational Momentum
   : Strong Q2 FY2026 results demonstrate the effectiveness of the DRIVE cost transformation program and pricing power in core package delivery

3. ** shareholder Returns**: The company has a proven track record of returning capital to shareholders through buybacks and dividends

4. Attractive Valuation
   : Trading at approximately 12.4x forward earnings with a 2.4% dividend yield provides a solid margin of safety

5. Growth Catalysts
   : 5-6% revenue growth guidance, $1 billion in additional cost savings, and improved operating margins support continued earnings growth

The spin-off represents a

that could unlock significant shareholder value by allowing market participants to more accurately value the LTL business and enabling both entities to pursue strategies tailored to their respective competitive landscapes. Raymond James’s maintained Outperform rating and raised price target of $305 reflects confidence in management’s ability to execute this strategic initiative while delivering operational improvements.

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[1] Raymond James Adjusts Price Target on FedEx to $305 From $255, Maintains Outperform Rating (https://www.marketscreener.com/news/raymond-james-adjusts-price-target-on-fedex-to-305-from-255-maintains-outperform-rating-ce7d50d2df89f223)

[2] Company Overview: FedEx Corporation (FDX) - Market Data (金灵AI数据)

[3] FedEx Corporation 8-K Filing - December 18, 2025 (https://www.sec.gov/Archives/edgar/data/1048911/000104891125000076/fdx-20251218.htm)

[4] FedEx’s Freight Division Spinoff Should Unlock More Shareholder Value (https://www.tsinetwork.ca/daily-advice/growth-stocks/fedexs-freight-division-spinoff-should-unlock-more-shareholder-value)

[5] FedEx (FDX) to Spin Off FedEx Freight, Aiming for Valuation Boost (https://www.gurufocus.com/news/4115141/fedex-fdx-to-spin-off-fedex-freight-aiming-for-valuation-boost)