FedEx Options Turn Defensive Ahead of September 28 Earnings

FedEx enters its September 28 earnings date with options traders showing their most defensive posture in weeks, even as short sellers quietly trimmed exposure after Monday's spike.

The clearest shift this week is in options. The put/call ratio jumped to 1.10 on Tuesday — nearly two standard deviations above its 20-day average of 0.77, making it the most elevated defensive reading since early August. That move stands out because the prior two weeks saw the ratio running well below 0.70, a relatively bullish tilt. The reversal suggests hedging demand picked up sharply as the earnings date came into view.

Short positioning tells a different story. Short interest fell 16.5% on Tuesday alone, pulling back to roughly 2.1% of the free float after spiking briefly to ~2.5% on Monday. On a weekly basis, SI is still up about 7% — so the Monday build and Tuesday unwind look more like tactical noise than a conviction move. The lending market offers no amplifying pressure: availability is effectively uncapped, borrow costs slid 40% on the week to just 0.22%, and the ORTEX short score has drifted only mildly higher to 32.4 from 31.5 ten days ago. This is not a market leaning hard against FedEx — positioning looks cautious rather than crowded.

The analyst community reflects the same tension. JP Morgan maintained Overweight this week but cut its target sharply, from $460 to $400 — a 13% reduction that signals the bull case is narrowing even among long-standing supporters. Evercore ISI moved the other way, raising its target from $323 to $350 while holding an In-Line rating, which is less a positive signal than an acknowledgment that the selloff had gone too far. The consensus mean target sits around $355, roughly 15% above Tuesday's close of $308, but the distribution has widened materially since June when targets clustered in the $425–$450 range at multiple firms. Valuation provides some anchor: the trailing P/E has compressed to about 15.7x and EV/EBITDA to roughly 10x, both toward the lower end of FedEx's recent range. The EPS surprise factor score ranks in the 74th percentile, meaning the company has a credible history of beating estimates — which the Street will be counting on.

The bull case rests on structural cost reduction and the scale advantages of being the world's largest express provider. Bears point to macro sensitivity, the complexity introduced by the FedEx Freight spinoff, and — as flagged in recent coverage — the CFO vacancy that leaves the company heading into a critical guidance conversation without a permanent finance chief. That leadership gap remains unresolved. On the price action, FedEx has dropped 7.9% over the past month and is down about 1.9% on the week, underperforming close peers: UPS added 1.9% on the week and EXPD gained 4.3%, though FWRD fell 5% and GXO was flat, so the sector backdrop is mixed rather than uniformly negative.

The last time FedEx reported — June 23 — the stock fell 3.6% the next day and 4.8% over the following five days, as investors absorbed results against an already-lowered bar. With the PCR now elevated, the stock near multi-month lows, and no CFO to anchor the guidance narrative, the September 28 print becomes less a question of whether volumes held up and more a test of whether management can articulate a credible margin recovery path — on its own.