FedEx Corporation
FDX Details
FedEx Company offers a variety of delivery, e-commerce, and commercial services through firms that operate independently and in competition with one another under the FedEx name. FedEx Express, FedEx Ground, FedEx Freight, and FedEx Services are among the company's segments.
Financial Results
- FDX reported the consolidated results for the third quarter ended February 28, 2023. Q3 results were negatively affected by the continued demand weakness, mainly at FedEx Express. Addiotnally, operating income was negatively affected by the effects of global inflation, partially offset by U.S. domestic yield improvement as well as cost-reduction actions.
- The company posted revenue of $22.2 billion (as reported) (GAAP) in Q3 FY 2023 as compared to $23.6 billion in Q3 FY 2022 (as reported) (GAAP).
- The company is advancing the global transformation through DRIVE. Through DRIVE, FDX is expecting to achieve over $4 Bn in the annualized structural cost reductions by fiscal 2025 end.
Outlook
For fiscal 2023, FDX is expecting earnings per diluted share of $13.80 - $14.40 before the MTM retirement plans accounting adjustments as compared to the prior forecast of $12.50 to $13.50 per diluted share.
Key Risks
Potential risks as well as uncertainties include the economic conditions in the global markets, the effect of the COVID-19 pandemic, geopolitical tensions, etc.
Fundamental Valuation
EV/Sales Multiple Based Valuation
Stock Recommendation
The stock has been valued using EV/Sales multiple-based illustrative relative valuation and the target price so arrived reflects a decline of low double-digit (in % terms). A slight discount has been applied to EV/Sales multiple-based (NTM) (Peer Average) considering geopolitical risks, global economic slowdown, etc.
Considering the current trading levels, risks associated as well as volatile market conditions on the back of rising interest rates, a ‘Sell’ rating is assigned to the “FDX” at the current market price of USD 235.52 per share (as of 05 April 2023, at 06:35 am PDT).
Technical Overview:
Markets are trading in a highly volatile zone currently due to certain macroeconomic and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.
Note 1: Past performance is neither an indicator nor a guarantee of future performance.
Note 2: The reference date for share price chart is based on 5 April 2023. The reference data in this report has been partly sourced from REFINITIV.
Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.
Disclaimer - This report has been issued by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and prepared by Kalkine and its related bodies corporate authorised to provide general financial product advice. Kalkine.com.au and associated pages are published by Kalkine.
Any advice provided in this report is general advice only and does not take into account your objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your objectives, financial situation and needs before acting upon it.
There may be a Product Disclosure Statement, Information Statement or other offer document for the securities or other financial products referred to in Kalkine reports. You should obtain a copy of the relevant Product Disclosure Statement, Information Statement or offer document and consider the statement or document before making any decision about whether to acquire the security or product.
You should also seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice in this report or on the Kalkine website. Not all investments are appropriate for all people.
The information in this report and on the Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of information contained in its reports, newsletters and websites. All information represents our views at the date of publication and may change without notice.
Kalkine does not guarantee the performance of, or returns on, any investment. To the extent permitted by law, Kalkine excludes all liability for any loss or damage arising from the use of this report, the Kalkine website and any information published on the Kalkine website (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine hereby limits its liability, to the extent permitted by law, to the resupply of services.
Please also read our Terms & Conditions and Financial Services Guide for further information.
Employees and/or associates of Kalkine and its related entities may hold interests in the securities or other financial products covered in this report or on the Kalkine website. Any such employees and associates are required to comply with certain safeguards, procedures and disclosures as required by law.
Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.