FDX changes
Pick any two versions below to diff them.
- Price
- $318.84
- Discount category
- Far above intrinsic value
- Next earnings
- 2027-01-28
- Next earnings is estimate
- Yes
- Company name
- FedEx
- Sector
- Package delivery and air freight
- About
- FedEx delivers packages and freight in the United States and around the world. It has two reportable segments. Express U.S. Domestic gives priority, deferred and ground package services in the United States, and Express International gives international package, freight and domestic services in other countries. In the three months to September 30, 2026, Express U.S. Domestic had revenue of $14,710 million and Express International $7,465 million, of total revenue of $22,855 million. FedEx Office and FedEx Dataworks are smaller businesses. On June 1, 2026, FedEx spun off its less-than-truckload business, FedEx Freight, and it keeps 19.9% of FedEx Freight's shares. It sold FedEx Supply Chain on October 1, 2026. FedEx changed its fiscal year end from May 31 to December 31, so it reports the seven months from June 1 to December 31, 2026 as a transition period. The head office is in Memphis, Tennessee. Raj Subramaniam is President and Chief Executive Officer.
- Thesis
- FedEx trades above its intrinsic value because investors pay for its cost cuts, its higher package prices and its share buybacks after the spin-off of FedEx Freight. In Q3 2026, revenue rose 12% to $22.9 billion and adjusted EPS rose to $3.74 from $2.93. FedEx raised its outlook for adjusted EPS for calendar 2026 to $18.00 to $18.60, and it bought back $2.0 billion of shares from June to September 2026. For the shares to earn this price, three things must be true. The Network 2.0 program must cut structural costs by $1.0 billion by the end of 2026 as planned, so that margins rise. Express International, with an adjusted operating margin of only 3.9% in Q3 2026, must earn more when trade rules change. The 5.9% average rate increase of January 4, 2027 must hold while volumes grow. The report on the transition period, expected in early 2027, is the next test, and it is the first under the new chief financial officer, Jamere Jackson. Weak trade volumes, higher wages or lower prices can make the premium hard to keep.
- Risks
- International trade drives Express International. New tariffs or other trade rules can lower volumes and margins, as they did in 2025 and 2026. Wages are the largest cost. A new contract for the pilots took effect on June 29, 2026, with an initial pay increase of 40% and a one-time payment of $625 million. Purchased transportation rates also rose in Q3 2026. FedEx competes with UPS, the U.S. Postal Service, Amazon and regional carriers. Lower prices or the loss of large customers can reduce margins. FedEx records its FedEx Freight shares at market value. Their price changes move GAAP EPS, as with the loss of $1.2 billion in Q3 2026. The cash of $8.0 billion at September 30, 2026 includes about $2.7 billion of tariff refunds that FedEx holds for customers.
- Balance sheet
- Cash: $8.0B Debt: $19.4B Net debt: $11.4B Interest cover: 11× Undrawn credit line: $3.5B Debt due within 12 months: $2.1B Last debt due: 2065 FedEx funds itself with senior notes in U.S. dollars and euros, finance leases, cash flow and a commercial paper program. At September 30, 2026, long-term debt on the balance sheet was $19,355 million: $17,304 million long-term and $2,051 million current. Without finance leases, the carrying value of long-term debt was $17.6 billion, at an average rate of 3.75%. In July 2026, FedEx bought back about $4.9 billion of notes in tender offers, and on September 14, 2026 it issued $1.1 billion of 5.750% notes due 2036, €1.1 billion of 4.000% notes due 2030 and €900 million of 4.625% notes due 2034. Cash and cash equivalents were $7,961 million, which includes about $2.7 billion of tariff refunds that FedEx holds for customers. FedEx also held FedEx Freight shares with a value of $3,254 million. No amount was drawn under the credit agreements, no commercial paper was outstanding, and $3.5 billion was available. Interest cover is operating income divided by net interest for the first nine months of 2026 ($3,313 million against $304 million). The last notes are due in 2065. There were 234,199,353 shares on October 26, 2026. As of 2026-09-30.
- Checkpoints
- Oct 28, 2026: Q3 2026 results: margins after the spin-off. Passed. Watch: Higher adjusted operating income and adjusted EPS pass; lower adjusted operating income fails. Outcome: Adjusted operating income rose to $1.20 billion and adjusted EPS to $3.74, and FedEx raised its 2026 outlook. Jan 28, 2027 (estimate): Transition period results and 2027 outlook. Pending. Watch: Adjusted EPS for calendar 2026 within or above $18.00 to $18.60 and $1.0 billion of Network 2.0 savings pass; a lower result fails. Jun 2028 (estimate): Disposal of the FedEx Freight shares. Pending. Watch: A tax-free disposal of the 19.9% stake that repays debt or returns cash pass; a delay or a tax cost fails.
- Recent events
- 2026-10-28: FedEx reported results for the quarter ended September 30, 2026. Revenue rose 12% to $22.9 billion, and adjusted operating income rose to $1.20 billion from $1.03 billion. Diluted EPS from continuing operations was $1.21, after a loss of $5.18 per share on the FedEx Freight shares, and adjusted EPS was $3.74, against $2.93. FedEx raised its calendar 2026 outlook for adjusted EPS to $18.00 to $18.60 and said that parcel rates rise by an average of 5.9% on January 4, 2027. It bought back about 6.3 million shares for $2.0 billion from June to September 2026. 2026-10-26: FedEx named Jamere Jackson, the Chief Financial Officer of AutoZone, as Executive Vice President and Chief Financial Officer from November 30, 2026. He follows Claude Russ, the interim Chief Financial Officer since June 1, 2026. 2026-10-01: FedEx completed the sale of FedEx Supply Chain to CMA CGM Group for about $1.4 billion. 2026-09-24: FedEx invested €2.2 billion in the holding company of InPost, a parcel locker company in Europe, as a member of a group of investors. It records the investment of $2,501 million with the equity method. 2026-07-14: FedEx completed cash tender offers for about $4.9 billion of its notes, mostly long-term notes due from 2041 to 2065. It used the dividend of about $4.1 billion from FedEx Freight and cash on hand, and it recorded a gain of $627 million before tax. 2026-06-01: FedEx completed the spin-off of FedEx Freight. Holders received one FedEx Freight share for every two FedEx shares held on May 15, 2026, and FedEx kept 19.9% of the FedEx Freight shares, which it plans to dispose of within 24 months. FedEx earlier reported fiscal 2026 results on June 23, 2026, with revenue of $94.7 billion and diluted EPS of $18.55, including FedEx Freight. After the spin-off, the quarterly dividend is $1.22 per share.