FedEx Freight Q4 Revenue Up 4.8% Despite 66.9% Income Decline
FDX•FedEx Freight posted fourth-quarter revenue of $2.41 billion, up 4.8%, while operating income plunged 66.9% to $158 million after $205 million in separation costs. Shares slipped 1.8% and Bank of America reiterated a Buy, raising its freight price target to $187 with 4–6% growth guidance.
1. Q4 Financial Results
In the quarter ended May 31, FedEx Freight generated $2.41 billion in revenue, marking a 4.8% year-over-year increase. Operating income declined 66.9% to $158 million, weighed down by $205 million of spinoff separation costs. Revenue benefits included a 3% rise in shipment weight and an 11.5% increase in revenue per shipment, offsetting a 5.9% drop in average daily shipments.
2. Share Price Reaction
FedEx Corporation shares fell 1.8% to $323.57 following the release of FedEx Freight’s standalone results, briefly retracing to a support level near $320. The stock remains 6% below its June 15 peak, while options data show a 10-day put/call volume ratio of 1.73 in the 85th percentile and a Schaeffer’s open interest ratio of 1.02, indicating elevated bearish positioning.
3. Analyst Outlook
Bank of America maintained its Buy rating on FedEx Freight and lifted the standalone price target from $185 to $187, citing the carrier’s strengthened pricing power in tight truckload markets and a focused sales strategy targeting LTL customers. The firm highlighted the carrier’s ability to capitalize on backhaul spillover and higher-margin verticals post-spinoff.
4. Forward Guidance and Strategy
FedEx Freight now expects 4%–6% revenue growth through 2026 as a standalone entity, driven by targeted outreach to small- and medium-size businesses and high-margin sectors such as grocery, healthcare, data centers and energy. Management plans to leverage tightened truckload capacity and fuel surcharge dynamics to sustain mixed volume recovery and margin expansion.
