FedEx Corporation (FDX): what the price assumes
In the published model solve dated 2026-Q2, anchored at $330.88, FedEx Corporation (FDX) is priced for +0.0% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-26.
Generated: 2026-08-30 · Source: https://boothcheck.com/report/FDX
Headline
| Field | Value |
|---|---|
| Ticker | FDX |
| Company | FedEx Corporation |
| Sector / Industry | Industrials |
| Current price | $330.88/sh |
| Composition | Federal Express - U.S. priority package 12% / Federal Express - U.S. deferred package 6% / Federal Express - U.S. ground package 39% / Federal Express - International priority package 10% / Federal Express - International economy package 6% / Federal Express - International domestic package 5% / Federal Express - U.S. freight 1% / Federal Express - International priority freight 3% / Federal Express - International economy freight 2% / Federal Express - Other 1% / FedEx Freight segment 9% / Other and eliminations 4% |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin (value-band context) | 2.4% |
| Operating margin today | 5.8% |
| Margin compression (value-band) | -3.4pp |
| Implied growth | 0.0% |
| Multiple paid | 20x operating income |
The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.
Solve inputs: computed at a 7% cost of capital with 4% terminal growth over a 5-year stage (computed at the 7% minimum rate; the CAPM rate 6.8% sits below it).
How unusual the bet is: within-range (limited comparison data)
| Reference | Value |
|---|---|
| vs own history | -0.30σ |
| cohort percentile (of 225 peers) | 50 |
Valuation X-Ray
The price is justified by relative-multiple and growth-DCF; earnings-power land below the price.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.40x | 5 | expensive |
| Earnings | 2.19x | 4 | expensive |
| Relative | 1.06x | 2 | expensive |
| Growth | 0.81x | 3 | justifies |
Families that justify the price: Relative, Growth Families that call it expensive: Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.4%); the inversion above states its own rate.
Per-Model Detail (n=14)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $643.34 | 0.51x | yes | FCF base $5.5B, growth 8% (input: historical growth), terminal g 4.0%, WACC 7.4%, 6yr projection |
| DCF Exit Multiple | Growth | $410.75 | 0.81x | yes | Exit EV/EBITDA: 8.8x / 10.8x / 12.8x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | — | — | no | P/E 18x (static sector reference · 2026-04), scenarios: 15.0x / 18.0x / 21.0x (bear / base = reference held flat / bull), EV/EBITDA 12x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $202.57 | 1.63x | yes | BV/sh $133.77, ROE (TTM) 14.0%, ke 9.3% |
| Two-Stage Excess Return | Asset | $246.70 | 1.34x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $273.44 | 1.21x | yes | Rev $94.7B, growth 8% (input: historical growth; tapered), Terminal P/S: 0.7x / 0.8x / 1.0x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $259.29 | 1.28x | yes | EPS $18.55, growth 14% (input: historical EPS growth), PEG=1.26 (Fair) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $121.63 | 2.72x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $5.53B × (1−24%) / WACC 7.4% → EPV (no growth) |
| Residual Income | Asset | $254.78 | 1.30x | yes | BV $133.77 + 5yr PV of (ROE (TTM) 14.0% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $236.29 | 1.40x | yes | √(22.5 × EPS $18.55 × BVPS $133.77) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | — | — | no | EBITDA $9.83B × sector EV/EBITDA 12.0x |
| FCF Yield | Earnings | $114.91 | 2.88x | yes | FCF $5116.0M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | $566.77 | 0.58x | yes | EPS $18.55 × (8.5 + 2×14.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $35.75 | 9.26x | yes | BV $133.77 × (ROIC 2.0% / WACC 7.4%) |
| P/Sales Sector | Relative | — | — | no | Revenue $94.72B × sector P/S 2.5x |
| PEG Fair Value | Relative | $388.94 | 0.85x | yes | EPS $18.55 × (PEG 1.5 × growth 14.0% (input: historical EPS growth)) → PE 21.0x |
| Earnings Yield | Earnings | $200.54 | 1.65x | yes | EPS $18.55 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Economic-Unit Decomposition (Sum Of The Parts)
One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.
| Unit | Role | Valuation basis | Revenue | Reported profit | Value evidence | Status |
|---|---|---|---|---|---|---|
| Federal Express segment | operating | enterprise | $82.3b | $0 operating-income | $114.4b indicative EV subtotal | indicative enterprise value |
| FedEx Freight segment | operating | enterprise | $8.8b | $0 operating-income | $17.6b indicative EV subtotal | indicative enterprise value |
| Package | operating | enterprise | $15.6b | $0 operating-income | withheld | unresolved no unit value |
| Freight | operating | enterprise | $6.1b | $0 operating-income | withheld | unresolved no unit value |
No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.
Solvency
| Field | Value |
|---|---|
| Net debt | $13.9b |
| Net debt / NOPAT (after-tax) | 3.36x |
| Net debt / operating income (pre-tax) | 2.55x |
| Share count CAGR (buyback) | -2.5% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
FedEx is valued on a segment basis anchored to the Federal Express Segment; at $326.25 the price implies an operating decline of about 4.4% a year for that segment, and the reverse-DCF band of about $326 to $726 places the price at the floor, so the market is pricing in decline.
The capital-allocation story is the bull case: FedEx completed the FedEx Freight spin-off on June 1, 2026 (retaining a 19.9% stake to monetize), exceeded $1 billion of fiscal 2026 transformation savings on top of the prior $4 billion DRIVE target, and continues buybacks; relative-multiple and growth-DCF frames justify the price while earnings-power says expensive.
The risk is moat erosion and leverage: Amazon insourced its deliveries, the parcel market is competitive and softening, fiscal 2026 EPS guidance of $16.90 to $18.10 fell short of the Street's roughly $19.86, and net debt near $17.2 billion (about 3x operating income) bites in a downturn.
Bull Case
FedEx's capital allocation tells you where management thinks the value is, and the recent moves are decisive. On June 1, 2026, the company completed the spin-off of FedEx Freight into a separate public company (FDXF), distributing one FDXF share for every two FedEx shares and retaining a 19.9% stake it plans to monetize over the following two years. Splitting out the less-cyclical, higher-margin freight business is a clear statement: management is sharpening the parent into a focused express-and-ground network whose value the market can price on its own, and the retained stake plus its planned monetization is a built-in source of capital. Alongside that, the company has bought back stock and reduced share count (down about 2.5% a year), returning capital while it restructures.
The other half of the capital story is the cost-out program, and it is delivering. FedEx exceeded its goal of $1 billion of transformation-related cost savings in fiscal 2026, on top of the DRIVE program that previously hit its $4 billion target. For a network business with enormous fixed costs in aircraft, trucks, and sortation, structural cost reduction is the most reliable lever to expand margin without depending on volume, and the fiscal 2026 result of $6.61 billion in adjusted operating income at a 7% margin on $94.7 billion of revenue shows the program flowing through. Self-help of this magnitude is what lets a mature logistics operator grow earnings even in a soft freight environment.
The valuation makes the setup attractive. At $326.25 (June 27, 2026) the price implies operating growth of about minus 4.4% a year for the segment carrying the premium, the Federal Express Segment; the market is pricing in decline. The bull wager is that a focused, post-spin FedEx, executing a proven cost program and returning capital, is worth more than a decline-priced multiple implies, and that the freight separation plus the retained-stake monetization unlocks value the conglomerate structure obscured.
Bear Case
The moat FedEx long relied on, a dense, hard-to-replicate parcel network, is being chipped at from both ends, and the data shows the erosion. At the top, the company's largest historical customer, Amazon, has spent years building its own logistics arm and now delivers the bulk of its own packages, removing a volume base FedEx used to count on. At the bottom, the U.S. Postal Service, regional carriers, and UPS all compete on the same lanes, and e-commerce shippers increasingly mix carriers to drive down rates. A network business loses its advantage when volume fragments, because the fixed-cost density that made it efficient gets spread over fewer packages. That is why the parent has had to lean so hard on cost-cutting: the revenue side is structurally pressured.
The valuation reflects the strain. The price implies an operating decline of about 4.4% a year for the Federal Express Segment, and while the relative-multiple and growth-DCF families reach the price, the earnings-power family says the stock is expensive. That earnings-power flag is the bear's foothold: it says that on its current, normalized earning power, FedEx is not cheap, and the bull case depends on the cost program and the spin-off unlocking value rather than on the core business growing. The fiscal 2026 EPS guidance of $16.90 to $18.10 came in well below the Street's roughly $19.86 expectation, and the stock fell on the outlook even after a strong quarter, which tells you the market is skeptical the self-help offsets the demand softness.
The structural cautions are heavy. Net debt sits near $17.2 billion against an asset-intensive, fuel-and-labor-exposed cost base, and net-debt-to-operating-income around 3x means the leverage bites in a downturn. The spin-off itself carries one-time costs (FedEx Freight's own guidance flagged spinoff costs weighing on results) and removes the more stable freight earnings from the parent, leaving FDX more exposed to the cyclical, competitive express-and-ground business. The DRIVE and transformation programs have largely been harvested, so the easy cost savings are behind it, and continued margin gains get harder from here. The bear's summary: a network whose volume moat is eroding, priced for decline yet flagged expensive on earnings power, carrying meaningful leverage into a softer, more competitive parcel market.
Valuation
FedEx is valued on a segment basis, anchored to the Federal Express Segment, which carries the priced-in premium. At $326.25 the price implies operating growth of about minus 4.4% a year for that segment over five years at a 7.2% cost of capital; the market is pricing in a modest decline, which the inversion reads as within range, with the segment's multiple in the upper half of its peer range.
The method families split in a familiar pattern. The relative-multiple and growth-DCF families justify the price, while the earnings-power family says expensive. The bull leans on the peer and forward frames, which credit the cost program and the value-unlock from the freight spin-off; the bear leans on the earnings-power frame, which says FedEx is not cheap on its current normalized earning power. The decline embedded in the price is the swing factor: if the express segment merely stabilizes, the growth and peer frames look right; if it keeps eroding, the earnings frame does.
The honest read: this is a restructuring story priced for decline, where the bet is on self-help and corporate simplification rather than organic growth. The strengths are concrete: $1 billion of fiscal 2026 transformation savings on top of the prior $4 billion DRIVE target, the completed FedEx Freight spin-off plus a 19.9% retained stake to monetize, and steady buybacks. The risks are a softening, more competitive parcel market and net debt near $17.2 billion. One important note on the inputs: the underlying segment composition still reflects the pre-spin structure, so post-June-2026 the parent is a more focused express-and-ground business, and the cleaner anchor for the price is management's fiscal 2026 EPS guidance of $16.90 to $18.10 and the post-spin margin path rather than the legacy combined figures.
Catalysts
The defining recent catalyst was the FedEx Freight spin-off, completed June 1, 2026. FedEx distributed one share of FedEx Freight (FDXF) for every two FedEx shares (record date May 15) and retained a 19.9% stake it plans to monetize over the following 24 months. The separation leaves the parent as a more focused express-and-ground network and gives the freight business its own listing (FedEx 8-K, TradingKey, TheStreet).
The fiscal 2026 results and guidance were the other catalyst. FedEx reported $94.7 billion in revenue and $6.61 billion in adjusted operating income at a 7% margin, and exceeded its goal of $1 billion in transformation-related cost savings for the year, on top of the DRIVE program's prior $4 billion. However, fiscal 2026 EPS guidance of $16.90 to $18.10 came in well below the Street's average of about $19.86, and shares fell on the outlook despite the strong quarter (TT, Yahoo Finance, TradingKey).
The forward catalysts are the post-spin operating trajectory and the parcel-demand backdrop. The thesis turns on whether the focused parent sustains margin gains as the transformation savings are harvested, how it monetizes the retained FDXF stake, and whether express and ground volumes hold against competition and a softer freight cycle. Continued cost execution and a stabilizing volume picture would support the case that the decline-priced stock is mispriced; weaker volumes, spinoff-related costs, or another guidance miss would be the clearest near-term risks. The next quarterly print is the first clean look at the standalone parent (TheStreet, TT).
Peer Cohorts (Per Segment, With Filing Citations)
Federal Express segment / Package / Freight (reported)
- UPS (United Parcel Service, Inc)
- FY2025 10-K: …dated as of August 26, 2003 (incorporated by reference to Exhibit 4.2 to Form S-3ASR (No. 333-192369), filed on November 15, 2013). 4.7 - Second Supplemental Indenture dated as of May 18, 2017 (incorporated by reference to Exhibit 4.1 to Form 8-K, filed on May 18, 2017). 4.8 - Indenture dated as of September 30,…
- FY2025 10-K: …us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2025-01-01 2025-12-31 0001090727 ups:TeamstersWesternRegionLocalOneSeventySevenHealthCarePlanMember us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2024-01-01 2024-12-31 0001090727…
- ODFL (OLD DOMINION FREIGHT LINE, INC.)
- FY2025 10-K: …DOT and by various state and federal agencies. These regulatory authorities have broad powers over matters relating to authorized motor carrier operations, as well as motor carrier registration, driver hours of service, safety and fitness of transportation equipment and drivers, transportation of hazardous materials,…
- FY2025 10-K: 10-K 0000878927 false FY http://fasb.org/us-gaap/2025#UsefulLifeTermOfLeaseMember http://fasb.org/us-gaap/2025#AccruedLiabilitiesCurrent http://fasb.org/us-gaap/2025#AccruedLiabilitiesCurrent http://fasb.org/us-gaap/2025#OtherLiabilitiesNoncurrent http://fasb.org/us-gaap/2025#OtherLiabilitiesNoncurrent…
- SAIA (Saia, Inc.)
- FY2025 10-K: 10-K false 0001177702 --12-31 FY one day three years http://fasb.org/us-gaap/2025#OperatingLeaseLiabilityNoncurrent http://fasb.org/us-gaap/2025#OperatingLeaseLiabilityNoncurrent http://fasb.org/us-gaap/2025#PropertyPlantAndEquipmentGross http://fasb.org/us-gaap/2025#PropertyPlantAndEquipmentGross 0001177702…
- FY2025 10-K: …Violations of applicable environmental laws or regulations or spills or other accidents involving hazardous substances have occurred in the past, can occur in the future, and may subject us to cleanup costs, liabilities not covered by insurance, substantial fines or penalties and to civil and criminal liability, any…
- XPO (XPO, Inc.)
- FY2025 10-K: …Signature Title Date /s/ Mario Harik Chairman and Chief Executive Officer (Principal Executive Officer) February 5, 2026 Mario Harik /s/ Kyle Wismans Chief Financial Officer (Principal Financial Officer) February 5, 2026 Kyle Wismans /s/ Christopher Brown Chief Accounting Officer (Principal Accounting Officer)…
- FY2025 10-K: 024-01-01 2024-12-31 0001166003 country:US 2024-01-01 2024-12-31 0001166003 us-gaap:OperatingSegmentsMember xpo:NorthAmericaExcludingUnitedStatesMember xpo:NorthAmericanLTLMember 2024-01-01 2024-12-31 0001166003 us-gaap:OperatingSegmentsMember xpo:NorthAmericaExcludingUnitedStatesMember…
- EXPD (EXPEDITORS INTERNATIONAL OF WASHINGTON, INC.)
- FY2025 10-K: …by Bradley S. Powell, Expeditors' Chief Financial Officer, dated May 21, 2025. (Incorporated by reference to Exhibit 10.25 to Form 8-K, filed on or about May 21, 2025.) 10.26 Form of Employment Agreement (Blake R. Bell; Incorporated by reference to Exhibit 10.26 to Form 8-K, filed on or about May 21, 2025. 10.27 Form…
- FY2025 10-K: 50 . ITEM 16 - FORM 10-K SUMMARY None. SIGNAT URES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: February 25, 2026 EXPEDITORS INTERNATIONAL OF…
- CHRW (C.H. ROBINSON WORLDWIDE, INC.)
- FY2025 10-K: …* Director Edward G. Feitzinger * Director Timothy C. Gokey * Director Mark A. Goodburn * Director Mary J. Steele Guilfoile * Director Michael H. McGarry * Director Paige K. Robbins * Director Paula C. Tolliver *By: /s/ Dorothy G. Capers Dorothy G. Capers Chief Legal Officer and Secretary 79
- FY2025 10-K: …2024-01-01 2024-12-31 0001043277 chrw:TransportationCustomersFreightMember us-gaap:TransferredOverTimeMember 2024-01-01 2024-12-31 0001043277 us-gaap:OperatingSegmentsMember chrw:SourcingMember chrw:NorthAmericanServiceTransportationNASTMember us-gaap:TransferredAtPointInTimeMember 2024-01-01 2024-12-31 0001043277…
FedEx Freight segment (reported)
- ODFL (OLD DOMINION FREIGHT LINE, INC.)
- FY2025 10-K: 3% of our revenue, respectively. For the last three fiscal years, more than 95% of our revenue was derived from services performed in the United States and less than 5% of our revenue was generated from services performed internationally. We believe the diversity of our customer base helps protect our business from…
- FY2025 10-K: . Our service centers are strategically located throughout the country so that we can provide the highest quality service and minimize freight rehandling costs. Although we have established primary responsibility for customer service at the local service center level, our customers may access information and initiate…
- SAIA (Saia, Inc.)
- FY2025 10-K: …analytics for operational and profitability insights, customer service enhancements, training and streamlined business processes. In 2025, Saia generated revenue of $3.2 billion and operating income of $352.2 million compared to revenue of $3.2 billion and operating income of $482.2 million in 2024. In 2025, the…
- FY2025 10-K: …shipment represents a distinct service that is a separately identified performance obligation. The typical transit time to complete a shipment is from one to five days . Billing for transportation services normally occurs after completion of the service and payment is generally due within 30 days after the invoice…
- XPO (XPO, Inc.)
- FY2025 10-K: U.S. market, estimated to be $53 billion in 2024. For the full year 2025, we moved approximately 16 billion pounds of freight through our network with a customer-focused organization of truck drivers, service center teams and sales professionals, facilitated by our proprietary technology. Our network serves…
- FY2025 10-K: …are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequence to or effects on the Company or its business or operations. The following…
- ARCB (ARCBEST CORPORATION)
- FY2025 10-K: 444 0.1 % Weight per shipment 1,086 1,105 (1.7) % Pounds per mile 18.35 18.11 1.3 % Average length of haul (miles) 1,124 1,126 (0.2) % (1) Workdays represent the number of operating days during the period after adjusting for holidays and weekends. Asset-Based Revenues Asset-Based segment revenues…
- FY2025 10-K: …90% of the total ocean international less-than-container load market and approximately 80% of the full container load import market. We also offer warehousing and distribution services to and from major global ports to streamline our customers' ocean shipping processes. Moving Under the U-Pack brand, our household…
- KNX (Knight-Swift Transportation Holdings Inc.)
- FY2025 10-K: …proposed rule that would require automated emergency braking on all new heavy-duty trucks. Additionally, in 2023, NHTSA issued an advance notice of proposed rulemaking that would require side underride guards to be installed on all new trailers and semi-trailers. It remains to be seen, what, if any, final rules will…
- FY2025 10-K: …obligations and remains subject to further adjustments. The goodwill recognized represents expected synergies from combining the operations of DHE with the Company, including enhanced service offerings, as well as other intangible assets that did not meet the criteria for separate recognition. The goodwill is…
- WERN (WERNER ENTERPRISES, INC.)
- FY2025 10-K: 85 were company-operated and 315 were owned and operated by independent contractors. Our Werner Logistics segment operated an additional 27 drayage company trucks and 170 Final Mile delivery trucks at the end of 2025. We have historically grown organically, and more recently through a combination of organic growth and…
- FY2025 10-K: …our revenues within the United States or from North American shipments with origins or destinations in the United States. Our largest customer, Dollar General, accounted for 11 %, 11 %, and 10 % of our total revenues in 2025, 2024, and 2023, respectively. Revenues generated by Dollar General are reported in both of…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.