FedEx (FDX) closed at $374.72, up 1.42% on the day. The S&P 500 rose 0.05%, the Dow gained 0.1%, and the Nasdaq fell 0.22%.
Over the past month, FedEx shares rose 17.98%. The Transportation sector gained 8.02% over the same period, while the S&P 500 fell 1.99%.
The next results update is expected to show EPS of $4.06, down 9.98% year on year. Revenue is forecast at $23.46 billion, up 5.89% from the prior-year quarter.
For the full year, analysts forecast earnings of $18.38 per share and revenue of $92.6 billion. This would be up 1.04% for earnings and 5.32% for revenue versus last year.
Over the past month, the consensus EPS estimate increased by 0.11%. FedEx has a Zacks Rank of #3 (Hold), within a scale from #1 to #5.
FedEx trades on a forward P/E of 20.1, matching the industry average of 20.1. Its PEG ratio is 1.8 versus the industry average of 1.87.
The Transportation – Air Freight and Cargo industry has a Zacks Industry Rank of 86, placing it in the top 36% of 250+ industries. Zacks data states top 50% ranked industries outperform the bottom half by 2 to 1.
Given the stock’s strong 18% run-up over the last month, we see a potential for increased volatility heading into the upcoming earnings report. The key conflict for traders is this powerful momentum versus the forecast of a nearly 10% drop in earnings per share. This sets the stage for a significant price reaction to any surprise in the announcement.
We should also consider the wider economic picture, as the January 2026 U.S. consumer spending data came in stronger than anticipated, which supports the company’s projected 5.9% revenue growth. This positive economic signal, combined with the cost-cutting initiatives we saw FedEx implement throughout 2025, could help cushion the impact of weaker earnings. The market may be looking past the short-term profit dip towards a more efficient operation this year.
Implied volatility on FedEx options is already expanding, meaning the market is pricing in a move of several percentage points post-earnings. Historically, FDX has seen post-earnings moves average around 6%, but we saw a sharper 11% drop after the earnings miss in the third quarter of 2025. This history suggests that buying premium through strategies like long straddles or strangles could be effective, as they profit from a large move in either direction.
For traders who believe the positive momentum will continue, using bull call spreads could be a cost-effective way to play for more upside while defining risk. This strategy benefits from the run-up but costs less than buying calls outright, which is important given the currently expensive options. This approach makes sense if you believe the revenue story and recent operational improvements will outweigh the expected decline in profits.
Conversely, the projected earnings decline presents a clear opportunity for bearish plays. Buying put options or establishing bear put spreads would be a direct bet that the market will punish the stock for a lack of profitability, especially after its recent powerful rally. This strategy becomes more compelling if we see any negative pre-announcements from competitors or downward revisions in shipping volume forecasts in the coming days.
