FedEx Corporation (FDX): Key debates going into the first post spin, normal calendar print

FDX reports calendar 3Q:26 results this Wednesday, Oct. 28th, after the market close. We are modestly ahead of the street for 3Q, and expect a 4Q guide that is constructive to the current consensus outlook. Maintain Outperform, lower target price to $377. For 3Q26, we see a modest top-line beat but more meaningful upside on profits, with revenue 0.6% above consensus, adjusted operating income 6.7% above, and EPS 4.4% above. Revenue of $22.7bn implies 11.2% YoY growth, while our $1.19bn adjusted operating income estimate implies 15.1% growth and a 5.2% margin. We land at $832m of adjusted net income and adjusted EPS of $3.46 versus consensus of $3.31. We currently see greater upside to 4Q, where we are 10% ahead of consensus. We remain of the view that a tighter cargo market, progress on US and European restructuring, and a rational domestic pricing environment support upside to longer term earnings targets. The bear view is that FedEx is a cyclical stock enjoying a temporary boost from