FDX - Embedded Expectations Analysis - 2021 02 26
FedEx Corporation (FDX:USA) currently trades near historical averages relative to UAFRS-based (Uniform) earnings, with a 23.5x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may have concerns about shipping capacity, capex strategy execution, and SmartPost's value propositionSpecifically, management may lack confidence in their ability to ramp capacity for peak shipping seasons, execute their capex strategy without delays, and sustain SmartPost yield growth. In addition, they may be exaggerating future business shipping demand, the strength of their portfolio, and the expertise within their operating companies. Furthermore, management may lack confidence in their ability to optimize the FedEx Express International business and enable various shipping segments to collaborate with each other. Moreover, they may have concerns about the attractiveness of SmartPost's value proposition and the pace of recovery for retail and manufacturing industries. Finally, management may be exaggerating the benefits of their retail convenience network and the potential of their service providers' route optimization technology
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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