The following is a summary of the FedEx Corporation (FDX) Q2 2024 Earnings Call Transcript: Financial Performance: FedEx’s Q2 revenue saw a 3% increase at FedEx Ground, but suffered a decline of 4% at FedEx Freight and 6% at FedEx Express due to lower shipments and contraction in the market. Despite reductions in revenue, FedEx saw operating margin growth, reporting a 57% rise in adjusted operating income for the Ground Segment, a 11% rise for the Freight segment, but a significant 49% decline for Express. Despite expected declines in revenue, FedEx maintains its adjusted EPS outlook within $17 to $18.50. FedEx ended the quarter with a solid liquidity position of $6.7 billion and has completed another $500 million share repurchase transaction. Capital investments for the quarter were $1.3 billion, leading to a year-to-date CapEx of $2.6 billion. Business Progress: FedEx managed to grow its parcel volume in the US, Europe,

FedEx (NYSE:FDX) stock Analyst Ratings Date Upside/Downside Analyst Firm Price Target Change Rating Change Previous / Current Rating 12/20/2023 21.27% JP Morgan $322 → $305 Maintains Neutral 10/02/2023 25.25% Susquehanna $225 → $315 Upgrades Neutral → Positive 09/29/2023 31.21% HSBC → $330 Initiates Coverage On → Buy 09/22/2023 9.34% Loop Capital $255 → $275 Maintains Hold 09/22/2023 17.3% Deutsche Bank $255 → $295 Maintains Buy 09/22/2023 15.31% BMO Capital $280 → $290 Maintains Market Perform 09/21/2023 31.21% B of A Securities $309 → $330 Maintains Buy 09/21/2023 28.43% UBS $312 → $323 Maintains Buy 09/21/2023 5.37% Jefferies $245 → $265 Maintains Hold 09/21/2023 15.31% Stephens & Co. → $290 Reiterates Overweight → Overweight 09/21/2023 15.71% Evercore ISI Group $276 → $291 Maintains Outperform 09/21/2023 -18.49% Morgan Stanley $200 → $205 Maintains Equal-Weight 09/21/2023 11.33% Wells Fargo $270 → $280 Maintains Equal-Weight 09/21/2023 10.93% Raymond James $270 → $279 Maintains Outperform

JPMorgan analyst Brian Ossenbeck maintains FedEx (NYSE:FDX) with a Neutral and lowers the price target from $322 to $305.

FedEx’s outlook is likely better than the dour results from the shipping giant’s Express unit would suggest, Citi analysts say in a research note. “We think it is likely as simple as cyclical trough margins persisting as volume hits cycle lows,” they say. “When the cycle turns (which may be happening now), we think leverage will return.” They add that management’s inability to bolster margins in the segment likely hurts credibility. “We were disappointed in how much management sounded like the ‘old’ FedEx,” they say. FedEx CEO Raj Subramaniam took over last year, succeeding founder and longtime CEO Fred Smith.

FedEx’s F2Q bottom-line miss was primarily driven by the impact of severe macro headwinds in its Express unit’s volumes and the inability to move the cost needle as quickly in that segment, say analysts at Evercore ISI in a research note. They say that weak Express margins aren’t indicative of hiccups in FedEx’s cost-saving initiatives, which showed up more clearly in the Ground and Freight segments. The delivery giant did cut its revenue guidance for the second time this year, but its EPS guide remained intact, proving the initial successes of its cost initiatives, say the analysts.