FedEx FDX is reshaping its cost structure through the company-wide DRIVE initiative to better align operations with post-pandemic market conditions. The program delivered $1.8 billion in recurring savings in fiscal 2024 and another $2.2 billion in fiscal 2025.

In addition, FedEx is improving efficiency through network transformation initiatives such as Network 2.0, Tricolor and its European optimization efforts. These initiatives have enabled the company to surpass its fiscal 2026 transformation-related savings target of $1 billion. At the same time, investments in data and technology are helping FedEx enhance customer experience, secure new business and unlock additional value.

However, geopolitical tensions and persistent inflation continue to pressure consumer sentiment and economic growth, resulting in softer shipping demand. To counter these headwinds, FedEx has stepped up cost-reduction efforts by cutting flight frequencies, parking aircraft and reducing its workforce. These initiatives contributed to better-than-expected earnings and revenues in the fourth quarter of fiscal 2026.

Rival United Parcel Service UPS is also pursuing aggressive cost-cutting measures to navigate the weak demand environment. The company has eliminated multiple operational positions and closed several facilities as it restructures the network and focuses on higher-margin business opportunities.

A key part of UPS' strategy is reducing its dependence on Amazon AMZN. In 2025, UPS reached an agreement in principle with Amazon to reduce shipment volumes by more than 50% by June 2026. CEO Carol Tomé noted that Amazon was not UPS' most profitable customer and the planned volume reduction is allowing it to right-size the network while prioritizing more profitable business.

FDX’s Price Performance, Valuation & Earnings Surprise History

Shares of FDX have gained in single digits (% wise) in the past six months, outperforming its industry.

6-Month Price Performance

From a valuation standpoint, FDX trades at a 12-month forward price-to-sales ratio of 0.77X, making it cheap compared with industrial levels.

The company has an impressive earnings surprise history, as shown below.

FDX’s Zacks Rank

FDX currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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FedEx Corporation (FDX): Free Stock Analysis Report

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United Parcel Service, Inc. (UPS): Free Stock Analysis Report

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