FDX - Embedded Expectations Analysis - 2020 08 24
FedEx Corporation (FDX:USA) currently trades above historical averages relative to UAFRS-based (Uniform) earnings, with a 29.1x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may be concerned about volume growth, the FedEx Ground network, and liquidity generationSpecifically, management may have concerns about the sustainability of Europe and intercontinental volume growth, commercial volume recovery, and e-commerce demand growth. In addition, they may lack confidence in their ability to benefit from constrained air capacity, continue managing network capacity, and leverage the FedEx Ground network. Moreover, management may be exaggerating the revenue quality of FedEx Ground and the progress of their organizational structure streamline. Furthermore, they may lack confidence in their ability to further execute on their cost savings initiatives, capitalize on the manufacturing ramp-up, and generate sufficient liquidity
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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