FedEx is amid a major transformation that is finally flowing through to its financial results. The company’s cost-savings programs are delivering tangible improvements in efficiency and profitability. In the most recent quarter, FedEx posted +3% YoY revenue and +7% adjusted operating income, highlighting the early payoff from network consolidation and automation. FDX is benefiting from unified pickup and delivery operations, route densification, and overhead reduction. Trading at a 25% discount to peers while reaffirming its FY26 guidance for $1B in transformation savings and $4.5B in modernization capex, FedEx presents a compelling valuation entry point as it executes a multiyear margin expansion story. Trade timing & outlook FDX recently broke above its $250 resistance level while outperforming the S & P 500 and the broader transportation sector. The stock’s ability to hold that breakout level as new support suggests renewed institutional accumulation and technical strength. With the next earnings catalyst approaching on Dec. 18, investors have a clear timeline to evaluate continued margin leverage and transformation progress toward a $300 price target. Fundamentals FDX trades at a significant discount to its peers despite improving growth and profitability metrics. Forward PE ratio: 14.5× vs. industry average 18.9× Expected EPS growth: 9.3% vs. industry average 10.9% Expected revenue growth: 4.0% vs. industry average 4.1% Net margins: 4.7% vs. industry average 5.2% Bullish Thesis Operational transformation: Network 2.0 integration is driving measurable cost savings with $200 million in quarterly transformation benefits reported in Q1. Margin expansion: Ongoing execution of a unified U.S. delivery network is boosting adjusted operating income despite modest revenue growth. Digital moat: The FedEx Dataworks–ServiceNow partnership embeds logistics intelligence positioning FedEx for higher-margin contracts. Capex discipline: FY26 guardrails reaffirmed with $4.5B in modernization spending to sustain automation-driven gains. Options Trade With an IV Rank of 13%, FedEx options remain attractively priced for buying directional optionality. I’m looking to buy the Jan 16, 2026 $260/$300 Call Vertical @ $15.35 Debit. This entails: Buying the Jan 16, 2026 $260 call @ $19.90 Selling the Jan 16, 2026 $300 call @ $4.55 The maximum reward is $2,465 per contract if FDX is above $300 at expiration. The maximum risk is $1,535 per contract, if FDX is below $260 at expiration. The breakeven point for this trade is $275.35. View this Trade with Updated Prices at OptionsPlay Summary: FedEx has entered the next phase of its transformation, with early evidence of operating leverage and cost efficiencies translating into earnings growth. The company’s unified delivery network, and emerging digital ecosystem provide a strong foundation for sustained margin improvement. Trading at a material valuation discount to peers, FDX offers an attractive asymmetric opportunity for further upside as investor confidence builds into 2026. DISCLOSURES: None. All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
