FDX Earnings Move a "Coin Flip:" Metrics & Options to Watch

0:00We're back on Morning Trade Live. Let's focus on FedEx, the delivery giant reporting earnings after the close. You can see from this chart the stockers outperformed UPS over the last 12 months. FedEx is trading nearly 40% higher year-over-year with 20% gain so far in 2026. So let's take a look at some of the price action right now. We are down 7.10% of a percent on FedEx as we approach this earnings. Obviously a bellweather and a really good pulse check on the global economy and also trade with FedEx, no doubt tariffs. This energy shock will be feeding into some of the communication here from this name, but quite a divergence, as you can see here, between FedEx and UPS on this chart. So FedEx being the focus of the Morning Trade ahead of this report card. So joining us for a closer look now is Alex Koffee. Very good morning to you, Alex. Just walk us through the expectations here for FedEx. Yeah, building on what you were saying, Sam, the stock hit fresh records at the end of last month, but really since this conflict broke out in the Middle East, it started to

1:00slide. And so I do think the stakes are a little bit higher for this report from a macro read to kind of get an idea of what the flow of goods has looked like, you know, just recently when we get some of those guidance figures. That said, for the quarter that they're going to report, their adjusted EPS is expected at $4.14. That would be down sequentially from the $4.82 that they had, the quarter previously. And also it would be about a 7.5% decline if we were to hit that level from the 451 that they had in the same period last year. On a revenue basis, 23.6 billion, 23.59 billion is the estimate. That would be a slight uptick from the quarter sequentially. So quarter over quarter looking for a little bit of revenue growth, but also pretty substantial growth, about 6% from the same quarter last year. When you look at some of the other metrics that are tracked in terms of the breakdown,

2:01shipments per day will be looked at. That was 87,400 last quarter, expected around 82,100 this time around. And then also the weight per shipment, expected to remain steady around 923 pounds for that. So something to look at there. Also, the freight breakdown versus just their general package revenue breakdown is something to keep in mind. But all in all, this is going to be a read through barometer for the overall market. Expectations for move about 6.5% that's greater than the sub 6% average over time. In the last six quarters down four up to, so over the last two years, fully eight quarters, half and half. So really a coin flip, if you go off history, whether or not this will be a positive reaction or a negative one. Yeah, a lot of remains to be seen. Alex, as you say, I mean, we came into 2026 pretty optimistic on growth trajectory. And now obviously we are dealing with this conflict in the

3:05Middle East. So let's see what this economic bell weather in barometer has to say about that. Thanks so much for breaking down the numbers for us. A bit of a preview ahead of this earnings report. So let's trade FedEx now with Joe Tigay, portfolio manager of the rational equity arm of funder. And even though we've seen these gains and of course, these outperformance against the UPS, you're looking at a little bit more bearish approach here, Joe. Just talk us through that. Yeah, not a lot to do with the company, just more over the overall sentiment. I think Alex Nail that's saying this is a kind of a coin flip, what the market's going to do here. And I kind of set my trade up that way. I'm looking for a coin flip to the downside. Just looking at the 340, 335 put spread just expiring tomorrow. If it's a coin flip, then 50, 50 pay, I'll be 250 looking at it this morning. It was $2. So like my risk reward, they're just given the set up and everything we know. Now just broadly speaking, of course, this market is dealing with a ton of uncertainty. We saw how it named like micron yesterday.

4:05I have one of the best earnings reports I've ever seen and it still is lower. So it's just kind of a really tough environment for stocks right now. Obviously, the market doesn't like uncertainty. There is a lot of uncertainty in the marketplace. It seems like we're just waiting for the next headline, which is going to either take us out of this uncertainty and maybe look us up or give some more clarity to the downside and people will look for the exit all at the same time. Yeah, I mean, you're not getting it from the front page of the Wall Street Journal today with Hexess saying no time set on ending operations in Iran. So we're waiting for the policy prescription here. I believe we're going to be getting a bit of an update, perhaps from Trump's team later this afternoon. But I mean, it's a lot of wait and see. So we've broken through some pretty technical, technically important levels just in the last two sessions. Joe, just walk us through your thoughts. Yeah, below the 200 day moving average in the S&P 500, that's not great, just ignoring the headlines. Whenever you see that, that's very bad news for the market. If we stay underneath that big moving average, I could lead into some institutional selling, just

5:09some position taking. Having said that, people were ready for this, people were looking for downside protection for really this whole month. Puts have been being bought, hand over a fist. So the question is, if people already have the correction in the markets lower, does that put a little bit of a floor on some of these downward moves like we're seeing today? You know, we're off the lows right now. I think at some point, something has to break here where the market just decides, hey, we need to really put in some corrections. I think some sort of credit event would do that. We talked about the housing market very briefly. You're looking at, you know, private credit. There's a lot of different options out there. These higher energy prices could slow the economy down, which could trigger one of these credit risks. Right, and that's exactly what we're watching, any signs of potential demand destruction here. Joe, really appreciate it. Thanks so much for getting us across our example trade on FedEx and your thoughts on the markets today. Jotigay, portfolio manager of the rational equity arm, the fund.