11:08 AM EDT, 09/03/2024 (MT Newswires) -- FedEx ( FDX ) is expected to "modestly miss" its fiscal Q1 results due to a weak performance of the parcel business slightly offset by freight business and Drive initiative savings, Morgan Stanley said in an earnings preview on Tuesday.

The brokerage said that the main discussion will be around the company's fiscal Q2 and Q3 outlook and factors influencing these quarters such as the end of the USPS contract, peak season dynamics and challenging Drive initiative comparisons, which can potentially lead to "significant earnings volatility."

"The stock performance this quarter is likely to entirely hinge on management commentary or guidance on the walk from fiscal Q1 to Q2 and Q3," Morgan Stanley said. "Given the volatility in other less-than-truckload stock peers, there may be some resetting on the less-than-truckload optionality as well."

FedEx ( FDX ) fiscal Q1 earnings are scheduled for Sept. 19.

Morgan Stanley kept its $215 price target on FedEx ( FDX ) and reiterated an equalweight rating.

Shares of the company were down 1.9% in recent trading.

Price: 293.22, Change: -5.55, Percent Change: -1.86