FDX - Embedded Expectations Analysis - 2021 05 11
FedEx Corporation (FDX:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 24.9x Uniform P/E (Fwd V/E′). At these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about the Express segment, adjusted operating margin growth, and delivery densitySpecifically, management may lack confidence in their ability to sustain adjusted operating margin growth, grow the Ground segment profitably, and implement last-mile efficiency improvements. In addition, they may have concerns about incremental cost drags in the Express segment as well as the pace of recovery of global air cargo capacity. Moreover, management may lack confidence in their ability to improve delivery density across their networks, refinance existing debt, and continue integrating FedEx Express and TNT Express. Furthermore, they may have concerns about their vaccine distribution network and the sustainability of macro tailwinds for the international business
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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