FDX - Embedded Expectations Analysis - 2018 10 16
FedEx Corporation (FDX:USA) currently trades near recent averages relative toUAFRS-based (Uniform) Assets, with a 1.4x Uniform P/B. At these levels, the market has somewhat bullish expectations for the firm. However, management has concerns about their ability to meet financial targets, the impact of a downturn in global trade, and their ability to improve margins
Specifically, management may lack confidence in their ability to meet their reaffirmed guidance targets, and may be concerned about their ability to offset a potential slowdown in global trade. Moreover, they may be exaggerating the speed, size, and scope advantage of the FedEx network (relative to their competitors') and their optimism about their profitable growth potential. Finally, they may lack confidence in their ability to maintain double-digit operating margins, and to improve profitability through their integration of TNT
FedEx provides transportation, e-commerce and business services through companies under the FedEx brand. These companies are included in the following segments: Federal Express Corporation, including TNT Express B.V., is an express transportation company; FedEx Ground Package System, Inc., which is a provider of small-package ground delivery services; FedEx Freight Corporation, which is a provider of less-than-truckload freight services; and FedEx Corporate Services, Inc., which provides sales, marketing, information technology, communications, customer service, technical support, billing and collections services, and certain back-office functions.
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