FedEx (FDX) fiscal Q4 earnings per share were "expectedly squishy" although fiscal Q1 outlook was a surprise, Morgan Stanley said in a Wednesday note.

The company's management refrained from issuing fiscal 2026 outlook as the international environment continues to be volatile, but it highlighted that it is working to "actively match capacity with demand", the note added.

"With this starting point, it is hard to bridge to FY EPS growth in 2026 unless there is an overwhelming upcycle," according to the note.

FedEx's Network 2.0 transformation plan is in the next stage as it has "fully optimized" Canada and 45 stations in the US in fiscal Q4, the note said.

The management also pointed out that Europe remains a "significant opportunity" to improve financials in the long term, adding that the staff elimination plan would save $150 million annually in fiscal 2027, Morgan Stanley said.

Morgan Stanley maintained a $200 price target and an underweight rating on FedEx's stock.

Shares of the company were down 3% in recent Wednesday trading.

Price: 222.65, Change: -6.86, Percent Change: -2.99