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FDX

FedEx NYSE:FDX Stock Report

Last Price

US$238.22

Market Cap

US$61.9b

7D

5.9%

1Y

-14.3%

Updated

16 Aug, 2022

Data

Company Financials +
FDX fundamental analysis
Snowflake Score
Valuation5/6
Future Growth2/6
Past Performance2/6
Financial Health4/6
Dividends5/6

FDX Stock Overview

FedEx Corporation provides transportation, e-commerce, and business services in the United States and internationally.

FedEx Competitors

Price History & Performance

Summary of all time highs, changes and price drops for FedEx
Historical stock prices
Current Share PriceUS$238.22
52 Week HighUS$280.50
52 Week LowUS$192.82
Beta1.2
1 Month Change9.36%
3 Month Change17.02%
1 Year Change-14.27%
3 Year Change52.86%
5 Year Change13.83%
Change since IPO2,375.01%

Recent News & Updates

Aug 08

FedEx Freight adds new 218-door facility in Phoenix, Arizona

FedEx Freight, a subsidiary of FedEx (NYSE:FDX), added a new, 218-door facility in Phoenix, Arizona earlier this summer, bringing its door count to almost 26,000 this year. FedEx Freight President and CEO Lance Moll said, "We’re talking about more than adding buildings or square footage. This is about strategically planning capacity increases to better serve our customers in growing markets [...] We have several projects underway to modernize and selectively expand centers to increase capacity over the next several years."

Aug 01

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.

Shareholder Returns

FDXUS LogisticsUS Market
7D5.9%5.0%4.5%
1Y-14.3%-0.9%-8.9%

Return vs Industry: FDX underperformed the US Logistics industry which returned -1.8% over the past year.

Return vs Market: FDX underperformed the US Market which returned -9.6% over the past year.

Price Volatility

Is FDX's price volatile compared to industry and market?
FDX volatility
FDX Average Weekly Movement6.6%
Logistics Industry Average Movement6.6%
Market Average Movement7.6%
10% most volatile stocks in US Market16.8%
10% least volatile stocks in US Market3.1%

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

FoundedEmployeesCEOWebsite
1971446,000Raj Subramaniamhttps://www.fedex.com

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

How do FedEx's earnings and revenue compare to its market cap?
FDX fundamental statistics
Market CapUS$61.92b
Earnings (TTM)US$3.82b
Revenue (TTM)US$93.51b

16.2x

P/E Ratio

0.7x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
FDX income statement (TTM)
RevenueUS$93.51b
Cost of RevenueUS$70.10b
Gross ProfitUS$23.41b
Other ExpensesUS$19.59b
EarningsUS$3.82b

Last Reported Earnings

May 31, 2022

Next Earnings Date

Sep 22, 2022

Earnings per share (EPS)14.69
Gross Margin25.04%
Net Profit Margin4.08%
Debt/Equity Ratio79.4%

How did FDX perform over the long term?

See historical performance and comparison

Dividends

1.9%

Current Dividend Yield

23%

Payout Ratio

Does FDX pay a reliable dividends?

See FDX dividend history and benchmarks
When do you need to buy FDX by to receive an upcoming dividend?
FedEx dividend dates
Ex Dividend DateSep 01 2022
Dividend Pay DateOct 03 2022
Days until Ex dividend15 days
Days until Dividend pay date47 days

Does FDX pay a reliable dividends?

See FDX dividend history and benchmarks
We’ve recently updated our valuation analysis.

Valuation

Is FDX undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

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.

FDX key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue1x
Enterprise Value/EBITDA9.2x
PEG Ratio1x

Price to Earnings Ratio vs Peers

How does FDX's PE Ratio compare to its peers?

FDX PE Ratio vs Peers
The above table shows the PE ratio for FDX vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average17.5x
UPS United Parcel Service
16.4x2.1%US$179.2b
ZTO ZTO Express (Cayman)
28.8x23.2%US$21.7b
CHRW C.H. Robinson Worldwide
13.3x-12.2%US$14.6b
EXPD Expeditors International of Washington
11.5x-11.4%US$17.7b
FDX FedEx
16.2x15.8%US$61.9b

Price-To-Earnings vs Peers: FDX is good value based on its Price-To-Earnings Ratio (16.2x) compared to the peer average (17.5x).


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 (16.2x) compared to the US Logistics industry average (12.4x)


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.

FDX PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio16.2x
Fair PE Ratio22.7x

Price-To-Earnings vs Fair Ratio: FDX is good value based on its Price-To-Earnings Ratio (16.2x) 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 ($238.22) is trading below our estimate of fair value ($495.48)

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 more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.


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Future Growth

How is FedEx forecast to perform in the next 1 to 3 years based on estimates from 27 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


15.8%

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 (14.5% 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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Past Performance

How has FedEx performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


4.8%

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 (77.7%).


Return on Equity

High ROE: FDX's Return on Equity (15.3%) is considered low.


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Financial Health

How is FedEx's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

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).


Balance Sheet


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Dividend

What is FedEx current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


1.93%

Current Dividend Yield

Upcoming Dividend Payment

TodayAug 17 2022Ex Dividend DateSep 01 2022Dividend Pay DateOct 03 202232 days from Ex DividendBuy in the next 15 days to receive the upcoming dividend

Dividend Yield vs Market

Notable Dividend: FDX's dividend (1.93%) is higher than the bottom 25% of dividend payers in the US market (1.47%).

High Dividend: FDX's dividend (1.93%) is low compared to the top 25% of dividend payers in the US market (3.96%).


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 (39%), FDX's dividend payments are well covered by cash flows.


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Management

How experienced are the management team and are they aligned to shareholders interests?

3.4yrs

Average management tenure


CEO

Raj Subramaniam (56 yo)

3.42yrs

Tenure

US$5,170,126

Compensation

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 ($USD5.17M) is below average for companies of similar size in the US market ($USD12.87M).

Compensation vs Earnings: Raj's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: FDX's management team is considered experienced (3.4 years average tenure).


Board Members

Experienced Board: FDX's board of directors are seasoned and experienced ( 10.9 years average tenure).


Ownership

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

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

FedEx Corporation's employee growth, exchange listings and data sources


Key Information

  • Name: FedEx Corporation
  • Ticker: FDX
  • Exchange: NYSE
  • Founded: 1971
  • Industry: Air Freight and Logistics
  • Sector: Transportation
  • Implied Market Cap: US$61.915b
  • Shares outstanding: 259.91m
  • Website: https://www.fedex.com

Number of Employees


Location

  • FedEx Corporation
  • 942 South Shady Grove Road
  • Memphis
  • Tennessee
  • 38120
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/08/16 00:00
End of Day Share Price2022/08/16 00:00
Earnings2022/05/31
Annual Earnings2022/05/31


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.