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1. Company Snapshot

1.a. Company Description

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.


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.

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1.b. Last Insights on FDX

FedEx's recent performance was driven by strong Q2 earnings and revenue beats, with high single-digit revenue growth driven by yield and volume strength across US domestic package services. The company's strategic shift toward premium B2B verticals and robust cost reduction programs support its revenue and margin outlook. Analysts have increased their forecasts, with Raymond James Financial raising its price target to $305.00. Additionally, FedEx's structural cost cuts and easing macro conditions are expected to support EPS growth. A 30% price target boost by a Wall Street analyst has also caught investors' attention.

1.c. Company Highlights

2. FedEx Q3: Peak Performance and Strategic Momentum

FedEx Corporation’s third‑quarter fiscal 2026 results delivered a striking blend of top‑line growth and operational efficiency. Revenue climbed 8% year‑over‑year to $19.7 billion, propelled by robust package volumes and yield gains across nearly all services. Adjusted operating income surged 7% to $1.38 billion, while adjusted EPS rose 16% to $5.25, surpassing analysts’ $4.15 estimate. The company’s one‑time tax benefit of $0.41 per share further bolstered earnings, underscoring disciplined tax strategy. FedEx Express (FEC) revenue grew 10%, with adjusted operating margin expanding 50 basis points, reflecting improved yield and cost controls. FedEx Freight, however, faced margin pressure from LTL softness and separation costs, yet revenue quality improved through higher weight and revenue per shipment. Valuation metrics currently price in a 20.43 P/E, 3.07 P/B, 0.98 P/S, and 11.73 EV/EBITDA, while a 1.54% dividend yield and 4.86% free cash flow yield support a solid shareholder return profile. <cite>“The peak season was the most profitable in our history,”</cite> FedEx’s CFO remarked during the call, highlighting the strategic execution that underpinned the results.

Publication Date: Apr -10

📋 Highlights
  • Adjusted Operating & EPS Growth:: 7% increase in adjusted operating income and 16% adjusted EPS growth, including $0.41 from tax benefits.
  • Revenue Expansion:: 8% YoY revenue growth, with Federal Express Corporation (FEC) revenue up 10% and adjusted operating margin expanding 50 bps.
  • Revised Earnings Outlook:: FY '26 adjusted EPS raised to $19.30–$20.10/share, reflecting $600M tailwind from FEC volume-related revenue.
  • Network 2.0 Efficiency:: 35% of eligible volume now flows through 400 optimized facilities, driving $2B cumulative savings by 2027.
  • Spin-Off & Cost Management:: FedEx Freight spin-off on track for June 2026; FY '26 savings to exceed $1B, with $1.6B in expense increases offset.

Financial Highlights

Adjusted operating income rose 7% to $1.38 billion, driven by an 8% revenue increase and improved operating margins across FEC. The company reported a 16% EPS growth to $5.25, exceeding expectations and reflecting a favorable tax rate impact. FedEx’s FY ‘26 adjusted earnings outlook was upgraded to $19.30–$20.10 per diluted share, up from $17.80–$19.00, signaling confidence in continued profitability.

Revenue and Yield Strength

Revenue grew 8% YoY, with package services benefiting from yield and volume strength. FEC revenue expanded 10%, and adjusted operating margin widened 50 basis points. International volumes turned positive, and yields rose significantly, positioning the company well for a 6–7.5% revenue growth forecast in Q4.

Operating Margin and Cost Management

FedEx’s Network 2.0 optimization now channels roughly 35% of eligible volume through 400 facilities, targeting $2 billion in cumulative savings by 2027. The company’s $1.6 billion YoY general expense increase is offset by exceeding its $1 billion savings target, supporting a projected adjusted free cash flow of $3.8 billion.

Strategic Initiatives

FedEx plans a June 1 spin‑off of FedEx Freight, unlocking long‑term value, and has secured a $3.7 billion debt offering. The acquisition of InPost and launch of FedEx Returns+—an AI‑powered returns platform—are expected to be accretive in year 1. The company remains focused on reinvestment and opportunistic share repurchases while maintaining disciplined CapEx at $4.1 billion.

Outlook and Shareholder Value

For FY ‘26, the company projects 4% revenue growth and anticipates 8% FEC revenue growth mid‑point. Despite FedEx Freight’s flat or slightly declining Q4 revenue, the company expects sequential and YoY growth in adjusted operating income for FEC. With a robust free cash flow yield and a 5.53% ROIC, FedEx is positioned to deliver sustainable value to shareholders while navigating global trade and LTL market headwinds.

3. NewsRoom

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FedEx (NYSE:FDX) Director Sells $2,138,355.00 in Stock

08:52

Source: defenseworld.net

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FedEx (NYSE:FDX) EVP Sells $6,164,087.73 in Stock

08:05

Source: defenseworld.net

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Baxter Bros Inc. Sells 3,538 Shares of FedEx Corporation $FDX

Apr -17

Source: defenseworld.net

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Longleaf Partners Global Fund Q1 2026 Portfolio Review

Apr -16

Source: seekingalpha.com

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FedEx CEO: We are seeing the impact from tariffs

Apr -16

Source: youtube.com

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Longleaf Partners Fund Q1 2026 Contributors And Detractors

Apr -16

Source: seekingalpha.com

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Gina Adams Sells 20,450 Shares of FedEx (NYSE:FDX) Stock

Apr -16

Source: defenseworld.net

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Kawal Preet Sells 4,900 Shares of FedEx (NYSE:FDX) Stock

Apr -16

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.28%)

6. Segments

FedEx Express (Including TNT Express)

Expected Growth: 8.3%

Fast and secure delivery of high-value and time-sensitive shipments drives growth, fueled by increasing demand for express logistics, particularly in e-commerce and the need for reliable international shipping solutions.

Fedex Ground

Expected Growth: 4.5%

FedEx Corporation's growth is driven by increasing e-commerce demand, expansion in emerging markets, and strategic investments in digital transformation and logistics infrastructure.

FedEx Freight

Expected Growth: 4.5%

FedEx Freight's growth is driven by increasing e-commerce demand, expansion of its freight forwarding services, and strategic pricing strategies to maintain market share in the competitive LTL carrier market.

Corporate, Other, and Eliminations

Expected Growth: 4.5%

FedEx's consolidated corporate overhead, other revenue and eliminations segment is driven by growth in e-commerce, increasing demand for logistics services, and strategic cost management initiatives.

FedEx Services

Expected Growth: 8.2%

FedEx's logistics, and transportation services will drive growth, fueled by increasing global trade, demand for e-commerce, strategic acquisitions, and investments in digitalization and infrastructure.

7. Detailed Products

FedEx Express

Time-sensitive, door-to-door delivery of packages and freight, with a focus on speed and reliability.

FedEx Ground

Cost-effective, day-definite delivery of packages and freight, with a focus on reliability and efficiency.

FedEx Freight

Less-than-truckload (LTL) and truckload (TL) freight services for large shipments, with a focus on reliability and flexibility.

FedEx Office

Retail and printing services, including copying, printing, and shipping, with a focus on convenience and flexibility.

FedEx Supply Chain

Customized logistics and supply chain management services, with a focus on efficiency and visibility.

FedEx Trade Networks

International air and ocean freight forwarding services, with a focus on customs clearance and compliance.

FedEx Services

Customized logistics and transportation services, including warehousing and distribution, with a focus on flexibility and scalability.

8. FedEx Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

FedEx has a moderate threat of substitutes due to the presence of alternative logistics and transportation companies, but its strong brand reputation and extensive network mitigate this threat.

Bargaining Power Of Customers

FedEx has a low bargaining power of customers due to its large customer base and diversified revenue streams, making it less dependent on individual customers.

Bargaining Power Of Suppliers

FedEx has a moderate bargaining power of suppliers due to its dependence on fuel suppliers and aircraft manufacturers, but its large scale of operations and long-term contracts mitigate this threat.

Threat Of New Entrants

FedEx has a low threat of new entrants due to the high barriers to entry in the logistics and transportation industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

FedEx operates in a highly competitive industry with intense rivalry among established players, including UPS, DHL, and Amazon, which drives innovation and cost-cutting efforts.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 59.50%
Debt Cost 3.95%
Equity Weight 40.50%
Equity Cost 10.13%
WACC 6.45%
Leverage 146.93%

11. Quality Control: FedEx Corporation passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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TransDigm Group

A-Score: 7.0/10

Value: 3.0

Growth: 8.0

Quality: 6.7

Yield: 9.0

Momentum: 7.0

Volatility: 8.3

1-Year Total Return ->

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PACCAR

A-Score: 6.0/10

Value: 4.1

Growth: 6.7

Quality: 5.0

Yield: 8.0

Momentum: 4.0

Volatility: 8.3

1-Year Total Return ->

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Paychex

A-Score: 6.0/10

Value: 2.1

Growth: 5.8

Quality: 9.0

Yield: 7.0

Momentum: 2.5

Volatility: 9.3

1-Year Total Return ->

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Caterpillar

A-Score: 5.7/10

Value: 2.0

Growth: 6.9

Quality: 6.2

Yield: 3.0

Momentum: 8.5

Volatility: 7.3

1-Year Total Return ->

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UPS

A-Score: 5.4/10

Value: 4.9

Growth: 4.2

Quality: 4.9

Yield: 9.0

Momentum: 2.0

Volatility: 7.3

1-Year Total Return ->

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FedEx

A-Score: 5.3/10

Value: 5.6

Growth: 5.6

Quality: 4.1

Yield: 4.0

Momentum: 5.0

Volatility: 7.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

392.38$

Current Price

392.38$

Potential

-0.00%

Expected Cash-Flows