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FedEx (FDX)
NYSE:FDX
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FedEx
(NYSE:FDX)
Rating:77Outperform
Price Target:―
Positive Factors
Leadership
John Smith, who previously increased FedEx Freight's revenues by 15% during his earlier tenure as CEO, returns to the role, indicating potential positive impacts for the division.
Operational Enhancements
FedEx Freight plans to enhance its operations by adding to its dedicated sales force, launching an LTL-specific pricing/invoicing system, and reducing vendor spend through increased automation.
Negative Factors
Leadership Transition
John Smith's transition will leave a material void at Federal Express, which raises concerns ahead of the FedEx Freight spin.
Market Expectations
The announcement of standalone FedEx Freight’s leadership is viewed as a missed opportunity to bring in an outsider with a strong operating pedigree.
FedEx (FDX) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$54.18B
Dividend Yield2.44%
Average Volume (3M)1.80M
Price to Earnings (P/E)14.2
Beta (1Y)0.82
Revenue Growth0.34%
EPS Growth-8.45%
CountryUS
Employees306,000
SectorIndustrials
Sector Strength90
IndustryIntegrated Freight & Logistics
Share Statistics
EPS (TTM)4.51
Shares Outstanding239,598,920
10 Day Avg. Volume1,946,442
30 Day Avg. Volume1,795,893
Financial Highlights & Ratios
PEG Ratio8.79
Price to Book (P/B)1.96
Price to Sales (P/S)0.00
P/FCF Ratio15.21
Enterprise Value/Market Cap1.65
Enterprise Value/Revenue0.25
Enterprise Value/Gross Profit4.49
Enterprise Value/Ebitda2.04
Forecast
1Y Price Target
$281.94Price Target Upside30.04% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering19
FedEx Business Overview & Revenue Model
Company DescriptionFedEx 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. The company's FedEx Freight segment offers less-than-truckload freight transportation services. As of May 31, 2022, this segment had approximately 30,000 vehicles and 400 service centers. Its FedEx Services segment provides sales, marketing, information technology, communications, customer service, technical support, billing and collection, and back-office support services. The company's Corporate, Other and Eliminations segment offers integrated supply chain management solutions, specialty transportation, customs brokerage, and global ocean and air freight forwarding services; and document and business services, as well as retail access to its customers for its package transportation businesses. FedEx Corporation was founded in 1971 and is based in Memphis, Tennessee.
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 Key Performance Indicators (KPIs)
Any
Total Expense Breakdown
Analyzes all major expenses, providing insight into cost management and operational efficiency. This helps gauge how well FedEx controls costs relative to its revenue, impacting profitability and competitive positioning.
Analyzes all major expenses, providing insight into cost management and operational efficiency. This helps gauge how well FedEx controls costs relative to its revenue, impacting profitability and competitive positioning.
Data provided by:
Main Street Data
Main Street DataFedEx Financial Statement Overview
Summary
FedEx's financial performance is commendable with strong profitability, low leverage, and solid cash flows. Despite slight dips in net profit margin and some missing data, the company maintains a stable financial position with efficient operations, making it well-positioned in the transportation industry.Income Statement
FedEx demonstrates strong profitability with a healthy gross profit margin of 23.8% and a solid EBIT margin of 6.2% for TTM (Trailing-Twelve-Months). However, the net profit margin has slightly decreased to 4.5% from the previous annual report's 4.9%. Revenue growth is modest, indicating stability in revenue streams.85
Very Positive
Balance Sheet
The balance sheet highlights a strong equity position with a debt-to-equity ratio of 0.27, suggesting low leverage. Return on equity is impressive at 6.0% for TTM, reflecting efficient use of equity. However, the equity ratio could not be calculated due to missing total assets data for TTM.78
Positive
Cash Flow
FedEx's cash flow is robust with positive free cash flow growth of 9.4% for TTM. The operating cash flow to net income ratio of 1.84 indicates strong cash generation relative to income. However, the free cash flow to net income ratio of 0.88 suggests some room for improvement in free cash flow efficiency.82
Very Positive
| Breakdown | |||||
| TTM | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 87.81B | 87.69B | 90.16B | 93.51B | 83.96B | 69.22B | Gross Profit |
| 19.87B | 18.95B | 19.17B | 20.17B | 17.95B | 13.34B | EBIT |
| 5.41B | 5.56B | 4.91B | 6.25B | 5.86B | 3.29B | EBITDA |
| 10.84B | 10.87B | 10.60B | 9.77B | 11.75B | 6.34B | Net Income Common Stockholders |
| 3.92B | 4.33B | 3.97B | 3.83B | 5.23B | 1.29B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 5.21B | 6.50B | 6.82B | 6.90B | 7.09B | 4.88B | Total Assets |
| 85.04B | 87.01B | 87.11B | 85.99B | 82.78B | 73.54B | Total Debt |
| 37.03B | 37.72B | 38.33B | 37.19B | 36.46B | 36.12B | Net Debt |
| 31.90B | 31.22B | 31.51B | 30.30B | 29.38B | 31.24B | Total Liabilities |
| 58.34B | 59.42B | 61.02B | 61.05B | 58.61B | 55.24B | Stockholders Equity |
| 26.71B | 27.58B | 26.09B | 24.94B | 24.17B | 18.30B |
| Cash Flow | Free Cash Flow | ||||
| 3.43B | 3.14B | 2.64B | 3.07B | 4.25B | -771.00M | Operating Cash Flow |
| 7.21B | 8.31B | 8.81B | 9.83B | 10.13B | 5.10B | Investing Cash Flow |
| -3.89B | -5.20B | -6.17B | -6.82B | -6.01B | -5.85B | Financing Cash Flow |
| -3.76B | -3.43B | -2.60B | -3.02B | -2.09B | 3.38B |
FedEx Technical Analysis
Negative
216.81
Price Trends
223.81
Negative
243.98
Negative
261.09
Negative
Market Momentum
1.17
Negative
45.06
Neutral
24.67
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 216.81 is below the 20-day moving average (MA) of 219.62, below the 50-day MA of 223.81, and below the 200-day MA of 261.09, indicating a bearish trend. The MACD of 1.17 indicates Negative momentum. The RSI at 45.06 is Neutral, neither overbought nor oversold. The STOCH value of 24.67 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 1 New Risks
1.
The planned separation of FedEx Freight may not be completed on the terms or timeline currently contemplated, if at all, and there is no guarantee that the separation, if completed, will achieve the intended financial and strategic benefits. Q4, 2024
FedEx Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $54.18B | 14.20 | 14.74% | 2.44% | 0.34% | -8.45% | |
71 Outperform | $16.18B | 19.61 | 37.70% | 1.24% | 24.07% | 27.40% | |
71 Outperform | $83.93B | 14.46 | 35.96% | 6.59% | 1.30% | -0.76% | |
70 Outperform | $11.88B | 23.91 | 32.11% | 2.47% | -0.22% | 65.52% | |
67 Neutral | $15.03B | 12.81 | 15.68% | 3.88% | 13.41% | 10.00% | |
65 Neutral | $14.51B | 26.55 | 13.97% | 1.19% | -3.82% | -12.80% | |
64 Neutral | $4.46B | 11.94 | 5.17% | 249.36% | 4.00% | -12.35% |
* Industrials Sector Average
Performance Comparison
FDX
FedEx
216.81
-30.09
-12.19%
CHRW
CH Robinson
97.18
14.94
18.17%
EXPD
Expeditors International
113.47
-2.32
-2.00%
JBHT
JB Hunt
139.37
-16.94
-10.84%
UPS
United Parcel
95.85
-40.17
-29.53%
ZTO
ZTO Express
17.03
-6.88
-28.77%
FedEx Earnings Call Summary
Earnings Call Date:Mar 20, 2025
(Q3-2025)
| % Change Since: -11.94%|
Next Earnings Date:Jun 24, 2025
Earnings Call Sentiment Neutral
FedEx demonstrated strong revenue growth and cost savings in Q3, along with notable achievements in its European and healthcare segments. However, challenges such as the expiration of the US Postal Service contract, weak industrial economy, and inflationary pressures have impacted the company's outlook, leading to a lowered EPS forecast.Q3-2025 Updates
Positive Updates
Revenue Growth
FedEx achieved a 2% year-over-year revenue growth for the first time this fiscal year, driven by increased volume at Federal Express.
Cost Savings
The company achieved $600 million in DRIVE savings in Q3 and expects to reach a total of $2.2 billion in savings for FY ‘25.
Operating Income Growth
Adjusted operating income grew by 12% year-over-year, with a 17% increase at Federal Express despite headwinds from the expiration of the United States Postal Service contract.
European Market Progress
FedEx Europe achieved its best service levels in years, contributing to $600 million in DRIVE savings by the end of the fiscal year.
Acquisition of RouteSmart Technologies
FedEx acquired RouteSmart Technologies to enhance its route optimization capabilities, supporting Network 2.0 and global network transformation.
Growth in Healthcare Segment
FedEx is onboarding nearly $400 million in new annualized healthcare revenue and expects to exit FY ‘25 with approximately $9 billion in healthcare revenue.
Negative Updates
US Postal Service Contract Expiration
The expiration of the contract resulted in a $180 million headwind to adjusted operating income in Q3.
Weak Industrial Economy
Continued weakness in the industrial economy pressured higher-margin B2B volumes, impacting FedEx Freight with a 5% revenue decline.
Inflationary Pressures
Higher-than-expected inflationary pressures on the cost base contributed to a reduced FY ‘25 adjusted EPS outlook.
Lowered EPS Outlook
FedEx lowered its FY ‘25 adjusted EPS outlook from $19-20 to $18-18.60 due to uncertain demand and higher inflationary pressures.
Company Guidance
During FedEx's third-quarter fiscal 2025 earnings call, the company provided guidance highlighting a 2% increase in revenue and a 12% growth in adjusted operating income year-over-year, despite significant challenges such as the expiration of the United States Postal Service contract and severe weather events. The company achieved $600 million in DRIVE savings for the quarter, contributing to its goal of a $2.2 billion annualized run rate by fiscal year-end. FedEx also discussed the impact of a weak industrial economy, particularly on its higher-margin B2B volumes, while emphasizing its readiness to capture incremental flow-through upon economic recovery. The guidance included a revised adjusted EPS outlook for FY '25, lowered to $18 to $18.60 due to uncertain demand and higher inflationary pressures. FedEx's strategic focus remains on transforming its network, including Network 2.0 and Tricolor initiatives, which are expected to enhance efficiency and support new market growth opportunities. The company's capital allocation strategy includes a $4.9 billion CapEx plan for FY '25, with significant investments in fleet modernization and a commitment to returning $3.8 billion to shareholders through dividends and share repurchases.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.