Intrinsic value of FedEx - FDX

Previous Close

$216.00

  Intrinsic Value

$269.17

stock screener

  Rating & Target

buy

+25%

Previous close

$216.00

 
Intrinsic value

$269.17

 
Up/down potential

+25%

 
Rating

buy

We calculate the intrinsic value of FDX stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 57.9

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  19.76
  4.30
  4.37
  4.43
  4.49
  4.54
  4.59
  4.63
  4.67
  4.70
  4.73
  4.76
  4.78
  4.80
  4.82
  4.84
  4.86
  4.87
  4.88
  4.89
  4.91
  4.91
  4.92
  4.93
  4.94
  4.94
  4.95
  4.95
  4.96
  4.96
  4.97
Revenue, $m
  60,319
  62,913
  65,662
  68,573
  71,652
  74,905
  78,341
  81,966
  85,790
  89,821
  94,069
  98,542
  103,253
  108,212
  113,430
  118,919
  124,694
  130,767
  137,153
  143,866
  150,924
  158,341
  166,137
  174,329
  182,938
  191,982
  201,485
  211,468
  221,956
  232,972
  244,544
Variable operating expenses, $m
 
  50,488
  52,663
  54,966
  57,402
  59,976
  62,694
  65,562
  68,587
  71,776
  75,137
  77,961
  81,688
  85,610
  89,739
  94,082
  98,650
  103,455
  108,507
  113,818
  119,402
  125,270
  131,438
  137,919
  144,729
  151,885
  159,403
  167,301
  175,598
  184,313
  193,468
Fixed operating expenses, $m
 
  7,186
  7,366
  7,550
  7,739
  7,932
  8,131
  8,334
  8,542
  8,756
  8,975
  9,199
  9,429
  9,665
  9,906
  10,154
  10,408
  10,668
  10,935
  11,208
  11,488
  11,776
  12,070
  12,372
  12,681
  12,998
  13,323
  13,656
  13,997
  14,347
  14,706
Total operating expenses, $m
  55,282
  57,674
  60,029
  62,516
  65,141
  67,908
  70,825
  73,896
  77,129
  80,532
  84,112
  87,160
  91,117
  95,275
  99,645
  104,236
  109,058
  114,123
  119,442
  125,026
  130,890
  137,046
  143,508
  150,291
  157,410
  164,883
  172,726
  180,957
  189,595
  198,660
  208,174
Operating income, $m
  5,037
  5,238
  5,633
  6,057
  6,511
  6,997
  7,516
  8,070
  8,661
  9,289
  9,957
  11,383
  12,136
  12,936
  13,785
  14,684
  15,636
  16,644
  17,711
  18,840
  20,034
  21,296
  22,629
  24,039
  25,527
  27,100
  28,759
  30,511
  32,360
  34,311
  36,369
EBITDA, $m
  8,032
  8,407
  8,909
  9,446
  10,021
  10,634
  11,287
  11,982
  12,722
  13,507
  14,341
  15,226
  16,163
  17,157
  18,208
  19,321
  20,499
  21,744
  23,060
  24,451
  25,920
  27,471
  29,109
  30,838
  32,662
  34,587
  36,617
  38,759
  41,017
  43,397
  45,907
Interest expense (income), $m
  484
  522
  571
  622
  677
  735
  796
  861
  929
  1,001
  1,077
  1,157
  1,242
  1,330
  1,424
  1,522
  1,625
  1,734
  1,848
  1,969
  2,095
  2,228
  2,368
  2,515
  2,669
  2,831
  3,001
  3,180
  3,368
  3,566
  3,773
Earnings before tax, $m
  4,579
  4,716
  5,062
  5,434
  5,834
  6,262
  6,720
  7,209
  7,731
  8,287
  8,880
  10,225
  10,895
  11,606
  12,361
  13,162
  14,010
  14,910
  15,863
  16,871
  17,938
  19,068
  20,262
  21,524
  22,859
  24,269
  25,758
  27,331
  28,992
  30,745
  32,596
Tax expense, $m
  1,582
  1,273
  1,367
  1,467
  1,575
  1,691
  1,814
  1,946
  2,087
  2,238
  2,398
  2,761
  2,942
  3,134
  3,337
  3,554
  3,783
  4,026
  4,283
  4,555
  4,843
  5,148
  5,471
  5,812
  6,172
  6,553
  6,955
  7,379
  7,828
  8,301
  8,801
Net income, $m
  2,997
  3,443
  3,695
  3,967
  4,259
  4,571
  4,905
  5,263
  5,644
  6,050
  6,482
  7,464
  7,953
  8,472
  9,023
  9,608
  10,228
  10,884
  11,580
  12,316
  13,095
  13,919
  14,791
  15,713
  16,687
  17,716
  18,803
  19,952
  21,164
  22,444
  23,795

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  3,969
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  48,552
  46,499
  48,531
  50,682
  52,958
  55,362
  57,901
  60,581
  63,407
  66,387
  69,526
  72,833
  76,314
  79,979
  83,836
  87,893
  92,161
  96,650
  101,369
  106,331
  111,547
  117,030
  122,792
  128,847
  135,209
  141,894
  148,917
  156,296
  164,047
  172,189
  180,742
Adjusted assets (=assets-cash), $m
  44,583
  46,499
  48,531
  50,682
  52,958
  55,362
  57,901
  60,581
  63,407
  66,387
  69,526
  72,833
  76,314
  79,979
  83,836
  87,893
  92,161
  96,650
  101,369
  106,331
  111,547
  117,030
  122,792
  128,847
  135,209
  141,894
  148,917
  156,296
  164,047
  172,189
  180,742
Revenue / Adjusted assets
  1.353
  1.353
  1.353
  1.353
  1.353
  1.353
  1.353
  1.353
  1.353
  1.353
  1.353
  1.353
  1.353
  1.353
  1.353
  1.353
  1.353
  1.353
  1.353
  1.353
  1.353
  1.353
  1.353
  1.353
  1.353
  1.353
  1.353
  1.353
  1.353
  1.353
  1.353
Average production assets, $m
  25,901
  26,990
  28,169
  29,418
  30,738
  32,134
  33,608
  35,164
  36,804
  38,533
  40,355
  42,275
  44,296
  46,423
  48,661
  51,016
  53,494
  56,099
  58,839
  61,719
  64,746
  67,928
  71,273
  74,787
  78,480
  82,360
  86,437
  90,720
  95,219
  99,945
  104,909
Working capital, $m
  4,710
  818
  854
  891
  931
  974
  1,018
  1,066
  1,115
  1,168
  1,223
  1,281
  1,342
  1,407
  1,475
  1,546
  1,621
  1,700
  1,783
  1,870
  1,962
  2,058
  2,160
  2,266
  2,378
  2,496
  2,619
  2,749
  2,885
  3,029
  3,179
Total debt, $m
  14,931
  16,303
  17,782
  19,349
  21,005
  22,756
  24,604
  26,555
  28,613
  30,781
  33,067
  35,474
  38,009
  40,677
  43,484
  46,438
  49,545
  52,813
  56,249
  59,861
  63,658
  67,650
  71,844
  76,252
  80,884
  85,751
  90,864
  96,235
  101,878
  107,806
  114,032
Total liabilities, $m
  32,479
  33,851
  35,330
  36,897
  38,553
  40,304
  42,152
  44,103
  46,161
  48,329
  50,615
  53,022
  55,557
  58,225
  61,032
  63,986
  67,093
  70,361
  73,797
  77,409
  81,206
  85,198
  89,392
  93,800
  98,432
  103,299
  108,412
  113,783
  119,426
  125,354
  131,580
Total equity, $m
  16,073
  12,648
  13,200
  13,786
  14,404
  15,059
  15,749
  16,478
  17,247
  18,057
  18,911
  19,810
  20,757
  21,754
  22,803
  23,907
  25,068
  26,289
  27,572
  28,922
  30,341
  31,832
  33,399
  35,046
  36,777
  38,595
  40,505
  42,512
  44,621
  46,835
  49,162
Total liabilities and equity, $m
  48,552
  46,499
  48,530
  50,683
  52,957
  55,363
  57,901
  60,581
  63,408
  66,386
  69,526
  72,832
  76,314
  79,979
  83,835
  87,893
  92,161
  96,650
  101,369
  106,331
  111,547
  117,030
  122,791
  128,846
  135,209
  141,894
  148,917
  156,295
  164,047
  172,189
  180,742
Debt-to-equity ratio
  0.929
  1.290
  1.350
  1.400
  1.460
  1.510
  1.560
  1.610
  1.660
  1.700
  1.750
  1.790
  1.830
  1.870
  1.910
  1.940
  1.980
  2.010
  2.040
  2.070
  2.100
  2.130
  2.150
  2.180
  2.200
  2.220
  2.240
  2.260
  2.280
  2.300
  2.320
Adjusted equity ratio
  0.271
  0.272
  0.272
  0.272
  0.272
  0.272
  0.272
  0.272
  0.272
  0.272
  0.272
  0.272
  0.272
  0.272
  0.272
  0.272
  0.272
  0.272
  0.272
  0.272
  0.272
  0.272
  0.272
  0.272
  0.272
  0.272
  0.272
  0.272
  0.272
  0.272
  0.272

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,997
  3,443
  3,695
  3,967
  4,259
  4,571
  4,905
  5,263
  5,644
  6,050
  6,482
  7,464
  7,953
  8,472
  9,023
  9,608
  10,228
  10,884
  11,580
  12,316
  13,095
  13,919
  14,791
  15,713
  16,687
  17,716
  18,803
  19,952
  21,164
  22,444
  23,795
Depreciation, amort., depletion, $m
  2,995
  3,169
  3,276
  3,390
  3,510
  3,637
  3,771
  3,912
  4,061
  4,218
  4,384
  3,843
  4,027
  4,220
  4,424
  4,638
  4,863
  5,100
  5,349
  5,611
  5,886
  6,175
  6,479
  6,799
  7,135
  7,487
  7,858
  8,247
  8,656
  9,086
  9,537
Funds from operations, $m
  2,728
  6,612
  6,972
  7,357
  7,768
  8,208
  8,676
  9,175
  9,705
  10,268
  10,866
  11,308
  11,980
  12,693
  13,447
  14,246
  15,091
  15,984
  16,929
  17,927
  18,981
  20,095
  21,270
  22,512
  23,821
  25,203
  26,661
  28,199
  29,820
  31,530
  33,332
Change in working capital, $m
  -2,202
  34
  36
  38
  40
  42
  45
  47
  50
  52
  55
  58
  61
  64
  68
  71
  75
  79
  83
  87
  92
  96
  101
  107
  112
  118
  124
  130
  136
  143
  150
Cash from operations, $m
  4,930
  6,578
  6,936
  7,319
  7,728
  8,166
  8,631
  9,128
  9,655
  10,216
  10,811
  11,249
  11,919
  12,628
  13,379
  14,174
  15,016
  15,905
  16,846
  17,839
  18,889
  19,998
  21,169
  22,405
  23,709
  25,086
  26,538
  28,069
  29,684
  31,387
  33,182
Maintenance CAPEX, $m
  0
  -2,355
  -2,454
  -2,561
  -2,674
  -2,794
  -2,921
  -3,055
  -3,197
  -3,346
  -3,503
  -3,669
  -3,843
  -4,027
  -4,220
  -4,424
  -4,638
  -4,863
  -5,100
  -5,349
  -5,611
  -5,886
  -6,175
  -6,479
  -6,799
  -7,135
  -7,487
  -7,858
  -8,247
  -8,656
  -9,086
New CAPEX, $m
  -5,116
  -1,089
  -1,179
  -1,249
  -1,321
  -1,396
  -1,474
  -1,555
  -1,640
  -1,729
  -1,822
  -1,919
  -2,021
  -2,127
  -2,239
  -2,355
  -2,477
  -2,605
  -2,739
  -2,880
  -3,028
  -3,182
  -3,344
  -3,515
  -3,693
  -3,880
  -4,077
  -4,283
  -4,499
  -4,726
  -4,964
Cash from investing activities, $m
  -4,981
  -3,444
  -3,633
  -3,810
  -3,995
  -4,190
  -4,395
  -4,610
  -4,837
  -5,075
  -5,325
  -5,588
  -5,864
  -6,154
  -6,459
  -6,779
  -7,115
  -7,468
  -7,839
  -8,229
  -8,639
  -9,068
  -9,519
  -9,994
  -10,492
  -11,015
  -11,564
  -12,141
  -12,746
  -13,382
  -14,050
Free cash flow, $m
  -51
  3,135
  3,303
  3,509
  3,733
  3,975
  4,236
  4,517
  4,818
  5,141
  5,486
  5,661
  6,055
  6,474
  6,921
  7,396
  7,900
  8,437
  9,006
  9,610
  10,251
  10,930
  11,649
  12,411
  13,218
  14,071
  14,974
  15,928
  16,938
  18,005
  19,132
Issuance/(repayment) of debt, $m
  1,108
  1,394
  1,479
  1,566
  1,657
  1,751
  1,849
  1,951
  2,057
  2,169
  2,285
  2,407
  2,535
  2,668
  2,808
  2,954
  3,107
  3,268
  3,436
  3,612
  3,797
  3,991
  4,195
  4,408
  4,632
  4,867
  5,113
  5,372
  5,643
  5,928
  6,226
Issuance/(repurchase) of shares, $m
  -172
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  954
  1,394
  1,479
  1,566
  1,657
  1,751
  1,849
  1,951
  2,057
  2,169
  2,285
  2,407
  2,535
  2,668
  2,808
  2,954
  3,107
  3,268
  3,436
  3,612
  3,797
  3,991
  4,195
  4,408
  4,632
  4,867
  5,113
  5,372
  5,643
  5,928
  6,226
Total cash flow (excl. dividends), $m
  861
  4,529
  4,782
  5,076
  5,390
  5,726
  6,085
  6,468
  6,876
  7,310
  7,771
  8,069
  8,589
  9,142
  9,728
  10,349
  11,008
  11,704
  12,442
  13,223
  14,048
  14,921
  15,844
  16,819
  17,849
  18,938
  20,087
  21,300
  22,581
  23,932
  25,358
Retained Cash Flow (-), $m
  -2,289
  -522
  -553
  -585
  -619
  -654
  -691
  -729
  -769
  -810
  -854
  -899
  -947
  -997
  -1,049
  -1,104
  -1,161
  -1,221
  -1,284
  -1,350
  -1,419
  -1,491
  -1,567
  -1,647
  -1,731
  -1,818
  -1,910
  -2,007
  -2,108
  -2,215
  -2,326
Prev. year cash balance distribution, $m
 
  3,947
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  7,955
  4,229
  4,490
  4,771
  5,072
  5,394
  5,739
  6,107
  6,499
  6,917
  7,169
  7,642
  8,145
  8,679
  9,246
  9,847
  10,484
  11,158
  11,873
  12,629
  13,430
  14,277
  15,172
  16,119
  17,119
  18,176
  19,293
  20,472
  21,717
  23,032
Discount rate, %
 
  4.50
  4.73
  4.96
  5.21
  5.47
  5.74
  6.03
  6.33
  6.65
  6.98
  7.33
  7.70
  8.08
  8.49
  8.91
  9.36
  9.82
  10.31
  10.83
  11.37
  11.94
  12.54
  13.16
  13.82
  14.51
  15.24
  16.00
  16.80
  17.64
  18.52
PV of cash for distribution, $m
 
  7,612
  3,856
  3,883
  3,894
  3,886
  3,858
  3,809
  3,737
  3,641
  3,523
  3,293
  3,139
  2,966
  2,775
  2,570
  2,354
  2,132
  1,907
  1,683
  1,465
  1,257
  1,062
  883
  721
  578
  455
  351
  265
  195
  141
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

FedEx Corporation (FedEx) provides a portfolio of transportation, e-commerce and business services through companies competing collectively, operating independently and managed collaboratively, under the FedEx brand. The Company's segments include FedEx Express, TNT Express, FedEx Ground, FedEx Freight and FedEx Services. The FedEx Express segment offers a range of the United States domestic and international shipping services for delivery of packages and freight. TNT Express segment collects, transports and delivers documents, parcels and freight on a day-definite or time-definite basis. The FedEx Ground segment provides business and residential money-back guaranteed ground package delivery services. The FedEx Freight segment offers less-than-truckload (LTL) freight services. The FedEx Services segment provides its other companies with sales, marketing, information technology, communications, customer service and other back-office support.

FINANCIAL RATIOS  of  FedEx (FDX)

Valuation Ratios
P/E Ratio 19.3
Price to Sales 1
Price to Book 3.6
Price to Tangible Book
Price to Cash Flow 11.8
Price to Free Cash Flow -311.5
Growth Rates
Sales Growth Rate 19.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 6%
Cap. Spend. - 3 Yr. Gr. Rate 7.7%
Financial Strength
Quick Ratio 180
Current Ratio 0
LT Debt to Equity 92.8%
Total Debt to Equity 92.9%
Interest Coverage 10
Management Effectiveness
Return On Assets 7%
Ret/ On Assets - 3 Yr. Avg. 5.1%
Return On Total Capital 10.2%
Ret/ On T. Cap. - 3 Yr. Avg. 7.5%
Return On Equity 20.1%
Return On Equity - 3 Yr. Avg. 13.2%
Asset Turnover 1.3
Profitability Ratios
Gross Margin 72.8%
Gross Margin - 3 Yr. Avg. 74.2%
EBITDA Margin 13.4%
EBITDA Margin - 3 Yr. Avg. 11.3%
Operating Margin 8.4%
Oper. Margin - 3 Yr. Avg. 6.1%
Pre-Tax Margin 7.6%
Pre-Tax Margin - 3 Yr. Avg. 5.5%
Net Profit Margin 5%
Net Profit Margin - 3 Yr. Avg. 3.6%
Effective Tax Rate 34.5%
Eff/ Tax Rate - 3 Yr. Avg. 34.5%
Payout Ratio 14.2%

FDX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the FDX stock intrinsic value calculation we used $60319 million for the last fiscal year's total revenue generated by FedEx. The default revenue input number comes from 2017 income statement of FedEx. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our FDX stock valuation model: a) initial revenue growth rate of 4.3% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.5%, whose default value for FDX is calculated based on our internal credit rating of FedEx, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of FedEx.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of FDX stock the variable cost ratio is equal to 80.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $7011 million in the base year in the intrinsic value calculation for FDX stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for FedEx.

Corporate tax rate of 27% is the nominal tax rate for FedEx. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the FDX stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for FDX are equal to 42.9%.

Life of production assets of 11 years is the average useful life of capital assets used in FedEx operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for FDX is equal to 1.3%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $16073 million for FedEx - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 268.139 million for FedEx is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of FedEx at the current share price and the inputted number of shares is $57.9 billion.

RELATED COMPANIES Price Int.Val. Rating
UPS United Parcel 112.94 93.75  sell
ATSG Air Transport 23.33 22.70  hold
AIRT Air T 21.95 51.42  str.buy

COMPANY NEWS

▶ FedEx exec elected Chamber chairman   [10:25AM  American City Business Journals]
▶ Should Amazon Just Buy FedEx?   [10:08AM  Barrons.com]
▶ Six TN companies earn perfect LGBTQ scores   [11:30AM  American City Business Journals]
▶ See Inside: FedEx's state-of-the-art packaging lab   [Nov-15-17 03:50PM  American City Business Journals]
▶ FedEx debuts Kentucky facility   [12:30PM  American City Business Journals]
▶ FedEx Corp. Value Analysis (NYSE:FDX) : November 10, 2017   [Nov-10-17 01:12PM  Capital Cube]
▶ All Eyes on Trump at APEC Summit in Vietnam   [Nov-09-17 08:13PM  Bloomberg Video]
▶ What will Cuba sanctions mean for FedEx?   [04:11PM  American City Business Journals]
▶ FedEx exec takes part in global CEO summit   [03:45PM  American City Business Journals]
▶ FedEx Express to purchase up to 50 new planes   [11:22AM  American City Business Journals]
▶ FedEx cites 'substantial hurdles' delaying flights to Cuba   [01:45PM  American City Business Journals]
▶ Amazon Prime debuts free same-day deliveries in KC area   [09:03AM  American City Business Journals]
▶ FedEx and Walgreens hit relationship milestone   [Nov-06-17 03:50PM  American City Business Journals]
▶ How many packages could FedEx see during the holidays?   [Nov-02-17 01:40PM  American City Business Journals]
▶ Trump nominates FedEx Ground exec to government position   [Nov-01-17 04:45PM  American City Business Journals]
▶ FedEx Stock Could Burn Bears In November   [Oct-31-17 03:48PM  Forbes]
▶ 5 Things Boeing Co.'s Management Wants You to Know   [Oct-30-17 09:05PM  Motley Fool]
▶ Amazon's stock is up nearly $62 billion in a single day   [Oct-27-17 03:21PM  CNBC Videos]
▶ Fred Smith and son kickoff inaugural event at Memphis high school   [12:05PM  American City Business Journals]
▶ [$$] UPS Ramps Up Spending to Keep Up With Online Shoppers   [Oct-26-17 11:44PM  The Wall Street Journal]
▶ [$$] UPS Ramps Up Spending to Keep Up With Online Shoppers   [01:30PM  The Wall Street Journal]
▶ UPS gears up for holiday season   [01:29PM  Yahoo Finance Video]
▶ FedEx gets tax abatement for new $18M distribution center in Conroe   [Oct-24-17 04:15PM  American City Business Journals]
▶ Bearish Engulfing Could Jeopardize Amazon Rally   [Oct-19-17 10:52AM  Investopedia]
▶ Amazons new lockers help control package overloads   [Oct-18-17 02:03PM  Yahoo Finance Video]
▶ Amazon applies for PILOT to invest $72M in Memphis facility   [Oct-13-17 05:40PM  American City Business Journals]
▶ FedEx Ground plans $259M development   [Oct-11-17 03:10PM  American City Business Journals]
▶ Buy FedExIt Will Not Be Amazoned: Cowen   [Oct-10-17 04:51PM  Investopedia]
▶ FedEx delivery service to reach 34 million people   [Oct-09-17 06:30PM  American City Business Journals]
▶ Earnings Season Ahead   [10:27AM  Zacks]
▶ Setting the Q3 Earnings Table   [10:11AM  Zacks]
▶ No, FedEx Is Not Amazon's Next Victim   [09:49AM  Barrons.com]
▶ Is It Time To Lock In Your Stock Gains?   [06:00AM  Investopedia]
Financial statements of FDX
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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