Fedex Corporation Stock Fair Value – FedEx’s Management Initiatives Not Enough to Overcome Headwinds, Rating Downgraded

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FEDEX ($NYSE:FDX): FedEx Corporation is one of the world’s largest transportation and logistics companies, providing integrated solutions to customers around the globe. Despite its robust management initiatives, the company has recently been downgraded by rating agencies due to strong headwinds in the industry. Despite executive leadership’s best efforts, the pressure of increased competition, slowing global economy, and soaring fuel costs have proven too strong for FedEx to overcome. The downgrading of FedEx’s stock reinforces the challenges facing the company in the current market. Management has made several moves to improve operations and profitability, such as reducing staff and cutting costs, but headwinds in the industry have been too strong to counteract.

The slowdown in global economic activity, coupled with higher fuel costs, has created a challenging environment for FedEx, resulting in a downgrade of their rating by credit rating agencies. Going forward, FedEx must continue to work to mitigate the headwinds and ensure that the business remains competitive and profitable. They must focus on developing new strategies to reduce costs, increase efficiency, and provide better services to customers while also finding ways to capture new markets. With adjusted management initiatives, FedEx can become an industry leader once again.

Market Price

On Wednesday, FEDEX CORPORATION stock opened at $221.5 and closed at $225.9, up by 2.1% from its prior closing price of $221.3. Despite this positive performance, FEDEX CORPORATION was recently downgraded by the ratings agency Moody’s Investors Service due to headwinds that are beyond the management’s control. The rating agency projected that the global economic slowdown will continue to negatively affect the company’s revenue and profit margins. Additionally, risks related to international trade policies and rising fuel prices also add to the strain on the company’s finances. In response, FEDEX CORPORATION has taken some initiatives to improve its cost efficiency and increase its focus on digital capabilities to reduce its operational costs.

However, these efforts may not be enough to offset the headwinds the company is facing. Live Quote…

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Fedex Corporation. More…

Cash Flow Snapshot

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Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Fedex Corporation. More…

Key Ratios Snapshot

Some of the financial key ratios for Fedex Corporation are shown below. More…

Analysis – Fedex Corporation Stock Fair Value

At GoodWhale, we conducted an analysis of FEDEX CORPORATION‘s fundamentals, and determined that its intrinsic value is around $257.6, as calculated by our proprietary Valuation Line. Currently, FEDEX CORPORATION stock is traded at $225.9, which represents a fair price that is undervalued by 12.3%. This presents an attractive opportunity for investors to capitalize on. More…

Peers

In the business world, companies are constantly vying for market share and mind share. Two companies that have been in competition for years are FedEx Corp and its main competitor United Parcel Service Inc. (UPS). The two companies have been in competition since the early days of the express shipping industry and they continue to compete for business today. Another company that FedEx competes with is United Airlines Holdings Inc. (UAL). UAL is an airline holding company that operates United Airlines, one of the largest airlines in the world. United and FedEx have been in competition for business since United launched its cargo operation in the early 1990s. Finally, Blink Charging Co (BLNK) is a company that provides electric vehicle (EV) charging stations. FedEx has been investing in EV technology and has been installing EV charging stations at its facilities around the world.

– United Parcel Service Inc ($NYSE:UPS)

Founded in 1907, United Parcel Service Inc is a package delivery and supply chain management company. The company has a market cap of 144.94B as of 2022 and a Return on Equity of 58.11%. UPS delivers packages and freight to more than 220 countries and territories around the world. The company has more than 500,000 employees and operates a fleet of more than 100,000 vehicles.

– United Airlines Holdings Inc ($NASDAQ:UAL)

United Airlines Holdings Inc is an American airline headquartered in Chicago, Illinois. It is the world’s third-largest airline when measured by revenue, after American Airlines and Delta Air Lines. United operates a large domestic and international route network, with an extensive presence in the Asia-Pacific region. The airline has a fleet of over 700 aircraft and employs over 86,000 people.

– Blink Charging Co ($NASDAQ:BLNK)

Blink Charging Co. is a provider of electric vehicle (EV) charging equipment and services. The company offers Blink EV charging stations and related products and services to consumers, businesses, governments, and utilities. Blink Charging Co. has a market cap of 675.75M as of 2022 and a Return on Equity of -29.61%.

Summary

FEDEX Corporation has recently seen a downgrade in its rating from analysts despite previously robust initiatives implemented by the company’s management. Despite this, FEDEX has responded with a range of initiatives, such as cost reductions, workforce restructuring and route optimization, in an attempt to mitigate the negative impact of the current market conditions. The outlook for the company, however, is still uncertain due to the ongoing effects of the pandemic. Investors should remain cautious when considering FEDEX as an investment option.