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FedEx Corporation (FDX)
:FDX
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FedEx
(NYSE:FDX)66Neutral
Positive Factors
Company Restructuring
FedEx shares are bid up 9% or $24 in after-hours trading as the company moved to pursue a full separation of FedEx Freight through the capital markets, creating a new publicly traded company.
Valuation
Positive tailwinds from parcel pricing make the stock attractive on a discounted SoTP basis.
Negative Factors
Earnings
Analysts expect earnings for the upcoming quarter to be significantly below consensus estimates.
FedEx (FDX) vs. S&P 500 (SPY)
Market Cap
$63.32B
Dividend Yield2.05%
Average Volume (3M)1.72M
Price to Earnings (P/E)16.8
Beta (1Y)0.80
Revenue Growth-0.63%
EPS Growth-7.18%
CountryUS
Employees430,000
SectorIndustrials
Sector Strength66
IndustryTransportation
Share Statistics
EPS (TTM)15.69
Shares Outstanding240,850,600
10 Day Avg. Volume1,656,988
30 Day Avg. Volume1,721,699
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.71
Price to Cash Flow (P/CF)11.80
P/FCF Ratio31.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$323.39Price Target Upside30.54% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering20
FedEx Business Overview & Revenue Model
Company DescriptionFounded in 1971, FedEx Corp. is a multinational delivery services company based in Tennessee. It provides transportation, e-commerce, and business services worldwide. The company offers integrated business solutions through operating companies competing collectively, operating collaboratively and innovating digitally under the FedEx brand.
How the Company Makes MoneyFedEx makes money primarily through its diverse range of delivery and logistics services, with its revenue model centered around three main segments: FedEx Express, FedEx Ground, and FedEx Freight. FedEx Express generates revenue through time-sensitive air and international shipping services, offering overnight and same-day deliveries. FedEx Ground focuses on cost-effective, day-definite delivery services within North America, primarily for e-commerce and business-to-business transactions. FedEx Freight provides less-than-truckload (LTL) freight services, catering to businesses with smaller shipment needs. Additionally, FedEx benefits from strategic partnerships with major retailers and e-commerce platforms, enhancing its service offerings and expanding its customer base. The company also leverages its logistics and supply chain management services to generate additional revenue, offering comprehensive solutions to streamline clients' operations.
FedEx Financial Statement Overview
Summary
FedEx shows a solid financial foundation with strong equity ratios and decent cash flow management. While profitability margins show some pressure due to a decrease in net profit margin and negative revenue growth, the company's reduced leverage and stable cash conversion provide a solid financial footing.Income Statement
The income statement shows solid profitability with a gross profit margin of 22.51% for TTM (Trailing-Twelve-Months), indicating effective cost management. However, the net profit margin decreased to 4.45% from the previous annual report's 4.94%, suggesting some pressure on bottom-line profitability. Revenue growth is slightly negative at -0.34%, reflecting a challenge in increasing sales.78
Positive
Balance Sheet
The balance sheet reveals a strong equity position with an equity ratio of 75.03% for TTM, indicating a stable financial foundation. The debt-to-equity ratio has improved significantly to 0.28 from 1.37, showing reduced leverage and financial risk. Return on equity (ROE) is 6.06%, suggesting moderate efficiency in generating profits from shareholders' equity.72
Positive
Cash Flow
The cash flow statement indicates strong cash generation, with an operating cash flow to net income ratio of 1.75, reflecting efficient cash utilization. Free cash flow growth is negative at -15.60%, indicating a decline in cash available after capital expenditures. However, the free cash flow to net income ratio is 0.68, showcasing decent cash conversion efficiency.75
Positive
| Breakdown | ||
| TTM | Jun 2024 | |
|---|---|---|
| Income Statement | Total Revenue | |
| 87.39B | 87.69B | Gross Profit |
| 19.68B | 18.95B | EBIT |
| 5.36B | 5.56B | EBITDA |
| 10.78B | 10.87B | Net Income Common Stockholders |
| 3.89B | 4.33B | |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |
| 6.50B | 6.50B | Total Assets |
| 87.01B | 87.01B | Total Debt |
| 37.72B | 37.72B | Net Debt |
| 31.22B | 31.22B | Total Liabilities |
| 59.42B | 59.42B | Stockholders Equity |
| 27.58B | 27.58B | |
| Cash Flow | Free Cash Flow | |
| 2.65B | 3.14B | Operating Cash Flow |
| 6.81B | 8.31B | Investing Cash Flow |
| -4.20B | -5.20B | Financing Cash Flow |
| -4.22B | -3.43B |
FedEx Technical Analysis
Negative
247.74
Price Trends
267.99
Negative
274.01
Negative
274.77
Negative
Market Momentum
-3.62
Positive
35.95
Neutral
48.67
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FDX, the sentiment is Negative. The current price of 247.74 is below the 20-day moving average (MA) of 259.12, below the 50-day MA of 267.99, and below the 200-day MA of 274.77, indicating a bearish trend. The MACD of -3.62 indicates Positive momentum. The RSI at 35.95 is Neutral, neither overbought nor oversold. The STOCH value of 48.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FDX.
FedEx Risk Analysis
FedEx disclosed 30 risk factors in its most recent earnings report. FedEx reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
FedEx Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $16.31B | 20.67 | 36.44% | 1.23% | 13.98% | 14.29% | |
72 Outperform | $101.87B | 17.64 | 34.59% | 5.47% | 0.16% | -13.41% | |
66 Neutral | $63.32B | 16.76 | 6.06% | 2.05% | -0.63% | -7.18% | |
66 Neutral | $13.69B | 36.12 | 27.07% | ― | 4.22% | 105.29% | |
65 Neutral | $15.76B | 28.37 | 14.22% | 1.10% | -5.79% | -20.32% | |
63 Neutral | $11.67B | 25.49 | 27.04% | 2.45% | 0.73% | 41.65% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% |
* Industrials Sector Average
Performance Comparison
FDX
FedEx
247.74
4.34
1.78%
CHRW
CH Robinson
98.35
27.74
39.29%
EXPD
Expeditors International
118.13
-1.43
-1.20%
XPO
XPO
116.80
-8.51
-6.79%
JBHT
JB Hunt
157.62
-40.21
-20.33%
UPS
United Parcel
116.79
-28.29
-19.50%
FedEx Earnings Call Summary
Earnings Call Date: Dec 19, 2024 | % Change Since: -10.20% | Next Earnings Date: Mar 20, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook, with positive steps like the FedEx Freight separation and substantial DRIVE savings, but it was balanced by significant challenges in the industrial economy affecting revenue and profit margins.Highlights
FedEx Freight Separation
FedEx announced the decision to separate FedEx Freight into a separate entity, aiming to unlock significant value for stockholders and position both companies for enhanced focus and competitiveness.
DRIVE Savings Achievement
FedEx achieved DRIVE savings of $540 million in Q2, with a target of $2.2 billion in incremental savings for FY '25.
International Export Growth
International export package volumes increased 9% in the quarter, driven by international economy, signaling progress from the Tricolor strategy.
European Market Progress
FedEx reported improved performance in the European market, achieving revenue growth and DRIVE savings with enhanced network optimization.
Peak Season Performance
December volumes are running ahead of forecast with peak surcharge revenue expected to be up year-over-year.
Lowlights
Weak Industrial Economy Impact
The soft global industrial economy constrained results, negatively impacting B2B volumes and LTL markets.
FedEx Freight Operating Profit Decline
FedEx Freight operating profit was down $179 million, affected by lower volumes, fuel surcharges, and weight per shipment.
Postal Service Contract Expiration
The expiration of the U.S. Postal Service contract posed a significant headwind, affecting operating profit.
Revenue Decline
Consolidated revenue declined 1% in the quarter due to the weak industrial economy and challenging year-over-year comparisons.
Company Guidance
During FedEx's Q2 2025 earnings call, the company provided guidance that reflects an updated adjusted EPS outlook range of $19 to $20, down from the previous range of $20 to $21. This revision is due to softer revenue expectations amid a weak industrial economy affecting B2B volumes, which comprise 60% of FedEx's package business. The company anticipates $2.2 billion in DRIVE savings for FY '25, with significant cost reductions already achieved, such as a 24% decrease in total U.S. domestic flight hours. For the Freight segment, FedEx expects slight revenue declines in the second half due to continued softness in average daily shipments but remains optimistic about future growth with the addition of 300 LTL specialists. Despite these headwinds, FedEx plans to execute the separation of FedEx Freight within approximately 18 months, aiming to unlock value and create two strong, independent public companies.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.