FedEx provides customers and businesses worldwide with a broad portfolio of transportation, e-commerce and business services. This includes shipping services for the delivery of packages and freight; international trade services specializing in customs brokerage, and ocean and air freight forwarding services; international trade advisory services, such as assistance with the customs-trade partnership against terrorism program; and customs clearance services, as well as global trade data, an information tool that allows customers to track and manage imports. The company was founded in 1971 and is based in Memphis, Tennessee.
FDX Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Fedex Corp. To summarize, we found that Fedex Corp ranked in the 16th percentile in terms of potential gain offered. We should note, though, that all scenearios modelled for this stock suggest it is overvalued. The most interesting components of our discounted cash flow analysis for Fedex Corp ended up being:
Fedex Corp's weighted average cost of capital (WACC) is 7%; for context, that number is higher than just 7.77% of tickers in our DCF set.
Relative to other stocks in its sector (Industrials), Fedex Corp has a reliance on debt greater than 63.25% of them.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Industrials that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as FDX, try TRI, ABB, DCO, WLFC, and EFX.
Source: Barron's COVID-19 has led to shelter-in-place policies that have brought the global economy to a practical standstill. I assumed falling economic activity would be bad for transportation stocks like Federal Express (FDX). The decline in global trade was bound to have a negative impact on business activity and deliveries....
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FedEx shares jumped higher Monday, while UPS traded at an all-time high, after analysts at Deutsche Bank and KeyBanc boosted their ratings on the world's two biggest package delivery groups on the back of improving pricing trends in the sector.