FedEx (FDX:NYS) Fundamental Valuation Report


Fundamental Valuation Report

FedEx(FDX:NYS)

Industrials:Integrated Shipping & Logistics

This Report was generated using the valuation tools available on StockCalc.com. For a free 30 day trial click here.

Close Price/Date
$166.73 (USD) 07/01/2019

Weighted Valuation
$235.94 (USD)

Overall Rating
Undervalued by 41.5%

Valuation Models Analyst Consensus: $240.60 (USD)
(in order of importance) Comparables: $229.98 (USD)
Adjusted Book Value: $233.86 (USD)
Valuation Methods This company is:
Cash Flow: Undervalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Undervalued on an Asset Valuation

Company Overview (FDX:NYS USD)

Price 166.73
Range 162.15 – 166.85
52 week 152.70 – 274.32
Open 164.89
Vol / Avg. 2.92M/4.36M
Mkt cap 43.52B
P/E 12.98
Div/yield 2.00/0.01
EPS 16.79
Shares 261.04M
Beta 1.64

Company Description

FedEx pioneered overnight delivery in 1973 and remains the world’s largest express delivery firm. In fiscal 2018, FedEx derived about 55% of its $65 billion top line from its Express division, 28% of sales from Ground, and 10% from its Freight less-than-truckload trucking segment. FedEx Office provides document production and shipping services, and Trade Networks offers freight forwarding. FedEx acquired the large Dutch parcel delivery firm, TNT Express, in 2016.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for FDX:NYS

Using a discounted cash flow model we generated an intrinsic value of $320.38 (USD) for FDX:NYS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

FDX:NYS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $320.38 1% 5% 1% 5%
WACC (or Ke) 10.72 $376.66 $277.02
Terminal Growth Rate 3.00 $282.31 $369.79
Tax Rate 0.05 $343.84 $296.93
Cash Flow 10,441,831,000 $298.10 $342.67
Capital Expenditures 0 $320.38 $320.38
Long Term Debt 13,782,000,000 $323.02 $317.74

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $229.98 (USD) for FDX:NYS. We also generated a valuation of $338.75 (USD) using other metrics and comparables.
The comparable companies were C.H. Robinson Worldwide (CHRW:NAS), Expeditors International (EXPD:NAS) and United Parcel Service (UPS:NYS).

Company FDX:NYS End Date Value
Earnings/Share $18.36 (USD)
Book Value/Share $73.91 (USD)
Sales/Share $254.50 (USD)
Cash Flow/Share $19.83 (USD)
EBITDA/Share $29.65 (USD)
Price Based on Comps Adjustment Factor (%)
$333.92 (USD) -41.4
$494.81 (USD) -51.0
$296.09 (USD) -20.7
$272.87 (USD) -35.6
$361.29 (USD) -12.8
FDX:NYS Ratios Used Average Values CHRW:NAS EXPD:NAS UPS:NYS
8.79 PE Ratio 18.19 18.81 20.15 15.60
2.18 PB Ratio 13.48 7.38 6.01 27.05
0.63 PS Ratio 1.16 0.72 1.56 1.21
8.13 PCF Ratio 16.86 17.06 20.42 13.10
6.91 EV to EBITDA 12.18 13.08 12.93 10.54

Multiples

Using a multiples approach we generated a valuation of  $285.33 (USD) for FDX:NYS

Company FDX:NYS End Date Value
Earnings/Share $18.36 (USD)
Book Value/Share $73.91 (USD)
Sales/Share $254.50 (USD)
Cash Flow/Share $19.83 (USD)
EBITDA/Share $29.65 (USD)
Price Based on Comps Adjustment Factor
$447.36 (USD) 0
$240.10 (USD) 0
$246.07 (USD) 0
$206.46 (USD) 0
$286.65 (USD) 0
Ratios Ratio Average
PE Ratio 24.37
PB Ratio 3.25
PS Ratio 0.97
PCF Ratio 10.41
EV to EBITDA 9.67

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  FDX:NYS for the last 10 years was  3.22

We ran the Adjusted Book Value for  FDX:NYS and generated a book value of  $72.55 (USD)
By multiplying these we get an adjusted valuation of  $233.86 (USD)

Analyst Data

In the Stockcalc database there are 5 analysts that provide a valuation for FDX:NYS. The 5 analysts have a concensus valuation for FDX:NYS for 2019 of $240.60 (USD).

FDX:NYS FedEx

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
6 2 0 4.4444 Outperform 2019-1-4

Current Price: 166.73 USD

Analyst Consensus
USD Millions 2019 2020 2021
Mean EPS 16.25 18.33 19.48
# EPS Analysts 8 8 2
Mean Revenue 69,831.30 74,315.70 76,633.70
# Revenue Analysts 5 5 2
Mean Target Price 240.60
Mean Cash Flow 26.56 30.05 32.96
Mean EBITDA 8,464.40 9,467.70 10,137.70
Mean Net Income 4,246.00 4,708.70 5,025.00
Mean Debt Outstanding 13,244.70 13,854.20 13,730.70
Mean Tax Rate 23.90 24.75
Mean Growth Rate 9.93
Mean Capital Expenditure 5,611.30 6,483.30 6,425.00

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.

The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).

The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.

With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.

If we have Analyst coverage for the company we use the consensus target price here.

Notice to User


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