FDX Stock Overview
FedEx Corporation provides transportation, e-commerce, and business services in the United States and internationally.
Price History & Performance
|Historical stock prices|
|Current Share Price||US$234.89|
|52 Week High||US$282.88|
|52 Week Low||US$192.82|
|1 Month Change||1.91%|
|3 Month Change||12.78%|
|1 Year Change||-14.98%|
|3 Year Change||44.88%|
|5 Year Change||14.65%|
|Change since IPO||2,340.42%|
Recent News & Updates
Is FedEx Stock A Buy After Future Growth Guidance?
FedEx stock is attractively valued. While there are macroeconomic headwinds, company-specific initiatives should drive earnings growth. Free cash flow is poised to improve as fleet modernization gets completed and ROIC improves. Investment Thesis FedEx's (FDX) stock has seen volatile trading over the last month after sharing its FY2025 goals with the street at the June 30th investor day event. The stock declined in the first half of July and then recovered in the second half as investors tried to assess the net impact of tailwinds from the company specific initiatives and headwinds from a tough macroeconomic environment. The company is anticipating a 4% to 6% revenue CAGR over the next three years and a 10% plus adjusted operating margin in FY2025. In addition, the management is targeting a significant reduction in capex, meaningful ROIC improvement, and an increase in cash return to shareholders through repurchases and dividends. Prior to that, in a challenging environment, FDX reported a good quarterly result primarily driven by double-digit yields across all the segments. While there are global supply chain issues and a difficult macro environment, which are impacting its volumes, FDX is concentrating more on yields to drive revenue growth. If we look at the current valuations of FDX, the stock is trading at ~10 times its FY23 EPS and at ~9 times its FY24 EPS. This reflects that investors are clearly worried about worsening macros and don't have much confidence in management's growth targets. While I understand investors' concerns about the macros, I believe even if management is able to only partially meet its FY25 goals, the stock can still outperform given its low valuations. FDX Stock Key Metrics After the pandemic, the company has recorded good revenue growth across all of its businesses with the pandemic acting as a catalyst for E-commerce demand. Due to the growing demand, which was outpacing supply, the company was able to achieve good yield growth. In addition, the company also implemented various pricing strategies, such as E-commerce peak surcharges which helped yields. Residential delivery services at FedEx Ground and US domestic package volume growth at FedEx Express contributed a good deal to revenues. However, the volume trend for the ground segment is now showing signs of normalization. The ground segment's total average daily package volume declined to 9.9 million in FY22 from 12.3 million in FY21. Volumes for the express segment also decreased to 6.2 million in 2022 compared to 6.7 million in 2021. These declines could be blamed on the difficult comparisons from accelerated E-commerce demand in 2021 and more consumers returning to in-store purchases. Despite volume headwinds, the company was able to increase revenues thanks to an improvement in yields. FDX Segment Revenue USD mn (Company Data, GS Analytics Research) FDX Segment Volumes (Company Data, GS Analytics Research) FDX Segment Yields (FedEx 10-K filing) Covid-related shutdowns had a significant impact on FDX's operations in FY20 and adversely affected operating margins. In 2021, things began improving and the company recorded y/y operating margin expansion across the segments as the higher demand allowed the company to charge more and pricing initiatives like E-commerce peak surcharges further aided to yield improvement. The company's emphasis on enhancing customer mix also assisted it in getting higher yields. In FY22, the adjusted consolidated operating margin was still lower than pre-pandemic levels primarily due to pressure from the ground segment. The ground segment's operating margin for FY22 remained at 8% which is below the pre-pandemic margin of 12.9% in FY19. Higher wage-related costs in a labour shortage environment and increased pressure from purchased transportation were the primary reasons for the sluggish operating margin performance in the ground segment. The express segment was able to deliver better operating margins compared to pre-pandemic margins as the company has started to realize the benefits of TNT Express air integration. Once the full TNT integration is completed, it can further improve the segment margins. The freight segment is outperforming other segments on the operating margin front with the benefits of good yield growth. The company's focus on revenue quality has contributed to achieving higher yields in the segment. FDX Consolidated Operating Margins (Company Filings, GS Analytics Research) FDX Segment Operating Margins (Company Data, GS Analytics Research) How was FDX's Future Guidance? FDX shared its FY25 financial targets with the street at its recent investor meeting. Consolidated revenue is expected to grow between 4% and 6% CAGR over the next three years. Adjusted EPS is expected to grow between 14% and 19% CAGR till FY25, which implies a range of $29 to $35 for FY25. By FY25, management is targeting a 10% adjusted consolidated operating margin (vs. 7.3% in FY22). The ground segment is expected to deliver adjusted operating margins of 11%-12% by leveraging the integrated network by FY25. The freight segment is expected to deliver a 20% adjusted operating margin with an attractive LTL freight market. On the express front, adjusted operating margins are expected to be at 8%-9% by FY25 with the benefits of TNT integration in Europe. Is FedEx Improving? If we look at FDX's future prospects, it is a tale of two stories with company-specific initiatives like yield improvement, cost reduction, TNT integration, and lower capex helping the business while tough macros serve as a headwind. However, I will focus more on the company-specific initiatives as the tough macroeconomic environment with rising interest rates is well understood by investors and is already getting reflected in the current low P/E multiple that the company is getting. E-commerce to drive ground revenue The pandemic was the primary reason for the accelerated growth in E-commerce in recent years. While I believe that the E-commerce growth rate will return to a more normalized level over the next couple of years, the long-term outlook remains compelling. E-commerce as a percent of retail in the U.S. is still at ~21%, and there is a multi-year growth story ahead of us. Small and medium businesses are likely to play an important part in this growth. FedEx expects the non-Amazon (AMZN) domestic parcel market to grow from 57 million pieces a day currently to 67 million pieces a day by FY25. So I believe this secular growth story will continue to drive the growth of the ground segment. The company is also coming up with innovations like the FedEx Surround platform to help its B2B customers manage the supply chain more effectively by avoiding any shipment issues. For example, FedEx Surround helps its healthcare customers identify and avoid any issues with the shipment if it becomes stressed. If the shipment is in the FDX network and if any issue occurs, FDX identifies it and initiates the necessary measures. The company reroutes the stressed shipment and takes measures like intervening, re-icing, and preserving efficacy to solve the issue and get it to the patient. The company is adding new capabilities to FedEx Surround as it allows the company to provide differentiated service to B2B customers. This kind of innovation should help FDX gain more customers and also charge a premium for its services helping both revenues and yields. Technology to improve efficiency and margins E-commerce has challenged the productivity of the ground segment over the past few years. Now, the company is taking technological initiatives like network 2.0 to improve network efficiencies and lower the associated costs. The Network 2.0 initiative is expected to help achieve FY25 goals for operating margins. Network 2.0 plans to use an operational insights platform, which will have digital and data capabilities to drive efficiencies across the network and achieve cost optimization. The operational insights platform will help the company improve its efficiency in dock and linehaul operations. The ground segment is expected to achieve a cost efficiency of ~$1 billion annually by FY25 with improved technological innovations and asset utilization. The freight segment's margin is also expected to benefit from efficiencies with the help of RFID technology, which allows improvement in visibility on docks and enables control at the handling unit level. In addition, the company is also taking steps like inflation plus pricing and e-Commerce surcharges to improve margins. TNT integration benefits The company has completed TNT air integration and should complete the final leg of full TNT integration in FY23. I believe the fully integrated network in Europe with TNT should significantly benefit the express segment in Europe. The integrated air network will bring in lower-cost airlines with more efficiency. Approximately $400- $600 million in profit improvement is expected through FY25 in Europe with the help of air network integration and business optimization and nearly half of the profit improvement in the profitability of the express segment should come from leveraging this integrated network in Europe. Lower Capex and ROIC Improvement In addition to revenue growth, yield improvement and cost reduction, the company is also planning to meaningfully lower its capex and improve ROIC.
At US$218, Is FedEx Corporation (NYSE:FDX) Worth Looking At Closely?
Let's talk about the popular FedEx Corporation ( NYSE:FDX ). The company's shares saw a decent share price growth in...
|FDX||US Logistics||US Market|
Return vs Industry: FDX underperformed the US Logistics industry which returned -3.1% over the past year.
Return vs Market: FDX underperformed the US Market which returned -12.9% over the past year.
|FDX Average Weekly Movement||6.7%|
|Logistics Industry Average Movement||6.7%|
|Market Average Movement||7.9%|
|10% most volatile stocks in US Market||17.2%|
|10% least volatile stocks in US Market||3.2%|
Stable Share Price: FDX is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 7% a week.
Volatility Over Time: FDX's weekly volatility (7%) has been stable over the past year.
About the Company
FedEx Corporation provides transportation, e-commerce, and business services in the United States and internationally. The company’s FedEx Express segment offers express transportation, small-package ground delivery, and freight transportation services; time-critical transportation services; and cross-border enablement, technology, and e-commerce transportation solutions. Its FedEx Ground segment provides day-certain delivery services to businesses and residences.
FedEx Fundamentals Summary
|FDX fundamental statistics|
Is FDX overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|FDX income statement (TTM)|
|Cost of Revenue||US$70.10b|
Last Reported Earnings
May 31, 2022
Next Earnings Date
Sep 22, 2022
|Earnings per share (EPS)||14.70|
|Net Profit Margin||4.08%|
How did FDX perform over the long term?See historical performance and comparison
2.0%Current Dividend Yield
Is FDX undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score 4/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Key Valuation Metric
Which metric is best to use when looking at relative valuation for FDX?
Other financial metrics that can be useful for relative valuation.
|What is FDX's n/a Ratio?|
Price to Earnings Ratio vs Peers
How does FDX's PE Ratio compare to its peers?
|FDX PE Ratio vs Peers|
|Company||PE||Estimated Growth||Market Cap|
UPS United Parcel Service
ZTO ZTO Express (Cayman)
CHRW C.H. Robinson Worldwide
EXPD Expeditors International of Washington
Price-To-Earnings vs Peers: FDX is good value based on its Price-To-Earnings Ratio (16x) compared to the peer average (16.8x).
Price to Earnings Ratio vs Industry
How does FDX's PE Ratio compare vs other companies in the Global Logistics Industry?
Price-To-Earnings vs Industry: FDX is expensive based on its Price-To-Earnings Ratio (16x) compared to the US Logistics industry average (11x)
Price to Earnings Ratio vs Fair Ratio
What is FDX's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
|Current PE Ratio||16x|
|Fair PE Ratio||22.7x|
Price-To-Earnings vs Fair Ratio: FDX is good value based on its Price-To-Earnings Ratio (16x) compared to the estimated Fair Price-To-Earnings Ratio (22.7x).
Share Price vs Fair Value
What is the Fair Price of FDX when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: FDX ($234.89) is trading below our estimate of fair value ($495.03)
Significantly Below Fair Value: FDX is trading below fair value by more than 20%.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is less than 20% higher than the current share price.
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How is FedEx forecast to perform in the next 1 to 3 years based on estimates from 27 analysts?
Future Growth Score2/6
Future Growth Score 2/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: FDX's forecast earnings growth (15.8% per year) is above the savings rate (1.9%).
Earnings vs Market: FDX's earnings (15.8% per year) are forecast to grow faster than the US market (12.9% per year).
High Growth Earnings: FDX's earnings are forecast to grow, but not significantly.
Revenue vs Market: FDX's revenue (3.9% per year) is forecast to grow slower than the US market (7.9% per year).
High Growth Revenue: FDX's revenue (3.9% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: FDX's Return on Equity is forecast to be low in 3 years time (16.3%).
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How has FedEx performed over the past 5 years?
Past Performance Score2/6
Past Performance Score 2/6
Growing Profit Margin
Earnings vs Industry
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: FDX has high quality earnings.
Growing Profit Margin: FDX's current net profit margins (4.1%) are lower than last year (6.2%).
Past Earnings Growth Analysis
Earnings Trend: FDX's earnings have grown by 4.8% per year over the past 5 years.
Accelerating Growth: FDX's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.
Earnings vs Industry: FDX had negative earnings growth (-26.8%) over the past year, making it difficult to compare to the Logistics industry average (78.8%).
Return on Equity
High ROE: FDX's Return on Equity (15.3%) is considered low.
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How is FedEx's financial position?
Financial Health Score4/6
Financial Health Score 4/6
Short Term Liabilities
Long Term Liabilities
Financial Position Analysis
Short Term Liabilities: FDX's short term assets ($20.4B) exceed its short term liabilities ($14.3B).
Long Term Liabilities: FDX's short term assets ($20.4B) do not cover its long term liabilities ($46.8B).
Debt to Equity History and Analysis
Debt Level: FDX's net debt to equity ratio (51.7%) is considered high.
Reducing Debt: FDX's debt to equity ratio has reduced from 92.9% to 79.4% over the past 5 years.
Debt Coverage: FDX's debt is well covered by operating cash flow (49.7%).
Interest Coverage: FDX's interest payments on its debt are well covered by EBIT (9.4x coverage).
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What is FedEx current dividend yield, its reliability and sustainability?
Dividend Score 5/6
Cash Flow Coverage
Current Dividend Yield
Dividend Yield vs Market
Notable Dividend: FDX's dividend (1.96%) is higher than the bottom 25% of dividend payers in the US market (1.52%).
High Dividend: FDX's dividend (1.96%) is low compared to the top 25% of dividend payers in the US market (4.09%).
Stability and Growth of Payments
Stable Dividend: FDX's dividends per share have been stable in the past 10 years.
Growing Dividend: FDX's dividend payments have increased over the past 10 years.
Earnings Payout to Shareholders
Earnings Coverage: With its low payout ratio (23.4%), FDX's dividend payments are well covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: With its reasonably low cash payout ratio (38.9%), FDX's dividend payments are well covered by cash flows.
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How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Raj Subramaniam (56 yo)
Mr. Rajesh Subramaniam, also known as Raj, has been President at FedEx Corporation since March 1, 2019 and serves as its Director since January 27, 2020. He serves as Chief Executive Officer of FedEx Corpo...
CEO Compensation Analysis
Compensation vs Market: Raj's total compensation ($USD8.24M) is below average for companies of similar size in the US market ($USD12.96M).
Compensation vs Earnings: Raj's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.
Experienced Management: FDX's management team is considered experienced (3.4 years average tenure).
Experienced Board: FDX's board of directors are seasoned and experienced ( 10.9 years average tenure).
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: FDX insiders have bought more shares than they have sold in the past 3 months.
Recent Insider Transactions
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
FedEx Corporation's employee growth, exchange listings and data sources
- Name: FedEx Corporation
- Ticker: FDX
- Exchange: NYSE
- Founded: 1971
- Industry: Air Freight and Logistics
- Sector: Transportation
- Implied Market Cap: US$61.035b
- Shares outstanding: 259.85m
- Website: https://www.fedex.com
Number of Employees
- FedEx Corporation
- 942 South Shady Grove Road
- United States
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/08/07 00:00|
|End of Day Share Price||2022/08/05 00:00|
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.