Intrinsic value of FedEx - FDX

Previous Close

$234.93

  Intrinsic Value

$627.31

stock screener

  Rating & Target

str. buy

+167%

Previous close

$234.93

 
Intrinsic value

$627.31

 
Up/down potential

+167%

 
Rating

str. 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 62.7

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   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, %
  19.80
  18.32
  16.99
  15.79
  14.71
  13.74
  12.87
  12.08
  11.37
  10.73
  10.16
  9.64
  9.18
  8.76
  8.39
  8.05
  7.74
  7.47
  7.22
  7.00
  6.80
  6.62
  6.46
  6.31
  6.18
  6.06
  5.96
  5.86
  5.77
  5.70
Revenue, $m
  72,262
  85,501
  100,025
  115,819
  132,856
  151,109
  170,550
  191,150
  212,886
  235,737
  259,689
  284,734
  310,872
  338,111
  366,464
  395,954
  426,611
  458,471
  491,579
  525,986
  561,750
  598,934
  637,610
  677,854
  719,749
  763,384
  808,853
  856,257
  905,702
  957,301
Variable operating expenses, $m
  57,885
  68,358
  79,849
  92,344
  105,823
  120,264
  135,644
  151,942
  169,138
  187,216
  205,450
  225,264
  245,944
  267,493
  289,924
  313,255
  337,509
  362,715
  388,908
  416,129
  444,422
  473,841
  504,439
  536,277
  569,422
  603,943
  639,916
  677,419
  716,537
  757,358
Fixed operating expenses, $m
  7,137
  7,294
  7,454
  7,618
  7,786
  7,957
  8,132
  8,311
  8,494
  8,681
  8,872
  9,067
  9,266
  9,470
  9,678
  9,891
  10,109
  10,331
  10,559
  10,791
  11,028
  11,271
  11,519
  11,772
  12,031
  12,296
  12,567
  12,843
  13,126
  13,414
Total operating expenses, $m
  65,022
  75,652
  87,303
  99,962
  113,609
  128,221
  143,776
  160,253
  177,632
  195,897
  214,322
  234,331
  255,210
  276,963
  299,602
  323,146
  347,618
  373,046
  399,467
  426,920
  455,450
  485,112
  515,958
  548,049
  581,453
  616,239
  652,483
  690,262
  729,663
  770,772
Operating income, $m
  7,241
  9,849
  12,722
  15,856
  19,247
  22,888
  26,774
  30,897
  35,254
  39,840
  45,367
  50,403
  55,663
  61,148
  66,861
  72,808
  78,993
  85,425
  92,113
  99,067
  106,299
  113,823
  121,652
  129,804
  138,296
  147,145
  156,371
  165,995
  176,040
  186,528
EBITDA, $m
  11,800
  15,113
  18,759
  22,733
  27,031
  31,643
  36,562
  41,782
  47,295
  53,097
  59,182
  65,551
  72,201
  79,135
  86,357
  93,873
  101,689
  109,816
  118,265
  127,049
  136,184
  145,686
  155,573
  165,866
  176,586
  187,757
  199,402
  211,548
  224,223
  237,456
Interest expense (income), $m
  484
  835
  1,183
  1,568
  1,991
  2,450
  2,945
  3,476
  4,042
  4,641
  5,273
  5,938
  6,635
  7,363
  8,123
  8,916
  9,740
  10,598
  11,490
  12,417
  13,380
  14,380
  15,421
  16,502
  17,627
  18,798
  20,016
  21,286
  22,608
  23,987
  25,425
Earnings before tax, $m
  6,406
  8,666
  11,154
  13,866
  16,797
  19,943
  23,297
  26,856
  30,613
  34,567
  39,429
  43,768
  48,300
  53,024
  57,946
  63,067
  68,395
  73,935
  79,696
  85,687
  91,918
  98,402
  105,150
  112,177
  119,498
  127,128
  135,085
  143,387
  152,053
  161,103
Tax expense, $m
  1,730
  2,340
  3,012
  3,744
  4,535
  5,385
  6,290
  7,251
  8,266
  9,333
  10,646
  11,817
  13,041
  14,317
  15,645
  17,028
  18,467
  19,962
  21,518
  23,135
  24,818
  26,569
  28,391
  30,288
  32,264
  34,325
  36,473
  38,714
  41,054
  43,498
Net income, $m
  4,676
  6,326
  8,142
  10,122
  12,262
  14,558
  17,007
  19,605
  22,348
  25,234
  28,783
  31,951
  35,259
  38,708
  42,300
  46,039
  49,928
  53,973
  58,178
  62,552
  67,100
  71,833
  76,760
  81,889
  87,233
  92,804
  98,612
  104,672
  110,998
  117,605

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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
Total assets, $m
  58,182
  68,841
  80,536
  93,252
  106,969
  121,666
  137,319
  153,905
  171,406
  189,804
  209,089
  229,254
  250,300
  272,231
  295,060
  318,804
  343,487
  369,139
  395,796
  423,499
  452,294
  482,234
  513,374
  545,776
  579,508
  614,641
  651,250
  689,418
  729,228
  770,773
Adjusted assets (=assets-cash), $m
  58,182
  68,841
  80,536
  93,252
  106,969
  121,666
  137,319
  153,905
  171,406
  189,804
  209,089
  229,254
  250,300
  272,231
  295,060
  318,804
  343,487
  369,139
  395,796
  423,499
  452,294
  482,234
  513,374
  545,776
  579,508
  614,641
  651,250
  689,418
  729,228
  770,773
Revenue / Adjusted assets
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
  1.242
Average production assets, $m
  38,443
  45,486
  53,214
  61,616
  70,679
  80,390
  90,733
  101,692
  113,255
  125,412
  138,154
  151,479
  165,384
  179,875
  194,959
  210,648
  226,957
  243,907
  261,520
  279,825
  298,851
  318,633
  339,209
  360,618
  382,907
  406,120
  430,310
  455,529
  481,833
  509,284
Working capital, $m
  -2,674
  -3,164
  -3,701
  -4,285
  -4,916
  -5,591
  -6,310
  -7,073
  -7,877
  -8,722
  -9,608
  -10,535
  -11,502
  -12,510
  -13,559
  -14,650
  -15,785
  -16,963
  -18,188
  -19,461
  -20,785
  -22,161
  -23,592
  -25,081
  -26,631
  -28,245
  -29,928
  -31,682
  -33,511
  -35,420
Total debt, $m
  21,907
  29,038
  36,861
  45,368
  54,545
  64,378
  74,849
  85,946
  97,653
  109,962
  122,864
  136,354
  150,434
  165,106
  180,378
  196,263
  212,776
  229,937
  247,771
  266,304
  285,568
  305,597
  326,430
  348,107
  370,674
  394,178
  418,670
  444,203
  470,837
  498,630
Total liabilities, $m
  38,924
  46,055
  53,878
  62,385
  71,562
  81,395
  91,866
  102,963
  114,670
  126,979
  139,881
  153,371
  167,451
  182,123
  197,395
  213,280
  229,793
  246,954
  264,788
  283,321
  302,585
  322,614
  343,447
  365,124
  387,691
  411,195
  435,687
  461,220
  487,854
  515,647
Total equity, $m
  19,258
  22,786
  26,657
  30,866
  35,407
  40,271
  45,453
  50,943
  56,735
  62,825
  69,208
  75,883
  82,849
  90,108
  97,665
  105,524
  113,694
  122,185
  131,009
  140,178
  149,709
  159,619
  169,927
  180,652
  191,817
  203,446
  215,564
  228,197
  241,375
  255,126
Total liabilities and equity, $m
  58,182
  68,841
  80,535
  93,251
  106,969
  121,666
  137,319
  153,906
  171,405
  189,804
  209,089
  229,254
  250,300
  272,231
  295,060
  318,804
  343,487
  369,139
  395,797
  423,499
  452,294
  482,233
  513,374
  545,776
  579,508
  614,641
  651,251
  689,417
  729,229
  770,773
Debt-to-equity ratio
  1.140
  1.270
  1.380
  1.470
  1.540
  1.600
  1.650
  1.690
  1.720
  1.750
  1.780
  1.800
  1.820
  1.830
  1.850
  1.860
  1.870
  1.880
  1.890
  1.900
  1.910
  1.910
  1.920
  1.930
  1.930
  1.940
  1.940
  1.950
  1.950
  1.950
Adjusted equity ratio
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  4,676
  6,326
  8,142
  10,122
  12,262
  14,558
  17,007
  19,605
  22,348
  25,234
  28,783
  31,951
  35,259
  38,708
  42,300
  46,039
  49,928
  53,973
  58,178
  62,552
  67,100
  71,833
  76,760
  81,889
  87,233
  92,804
  98,612
  104,672
  110,998
  117,605
Depreciation, amort., depletion, $m
  4,560
  5,264
  6,037
  6,877
  7,783
  8,754
  9,789
  10,885
  12,041
  13,257
  13,815
  15,148
  16,538
  17,988
  19,496
  21,065
  22,696
  24,391
  26,152
  27,982
  29,885
  31,863
  33,921
  36,062
  38,291
  40,612
  43,031
  45,553
  48,183
  50,928
Funds from operations, $m
  9,236
  11,590
  14,179
  16,999
  20,045
  23,313
  26,796
  30,489
  34,389
  38,490
  42,599
  47,099
  51,797
  56,695
  61,796
  67,104
  72,624
  78,363
  84,330
  90,534
  96,986
  103,697
  110,681
  117,951
  125,524
  133,416
  141,643
  150,225
  159,182
  168,533
Change in working capital, $m
  -442
  -490
  -537
  -584
  -630
  -675
  -719
  -762
  -804
  -845
  -886
  -927
  -967
  -1,008
  -1,049
  -1,091
  -1,134
  -1,179
  -1,225
  -1,273
  -1,323
  -1,376
  -1,431
  -1,489
  -1,550
  -1,614
  -1,682
  -1,754
  -1,829
  -1,909
Cash from operations, $m
  9,678
  12,080
  14,716
  17,583
  20,676
  23,988
  27,515
  31,251
  35,193
  39,336
  43,485
  48,025
  52,764
  57,703
  62,845
  68,195
  73,758
  79,542
  85,555
  91,807
  98,309
  105,073
  112,112
  119,440
  127,074
  135,030
  143,325
  151,979
  161,011
  170,442
Maintenance CAPEX, $m
  -3,208
  -3,844
  -4,549
  -5,321
  -6,162
  -7,068
  -8,039
  -9,073
  -10,169
  -11,326
  -12,541
  -13,815
  -15,148
  -16,538
  -17,988
  -19,496
  -21,065
  -22,696
  -24,391
  -26,152
  -27,982
  -29,885
  -31,863
  -33,921
  -36,062
  -38,291
  -40,612
  -43,031
  -45,553
  -48,183
New CAPEX, $m
  -6,360
  -7,043
  -7,727
  -8,402
  -9,064
  -9,711
  -10,342
  -10,959
  -11,563
  -12,157
  -12,742
  -13,324
  -13,906
  -14,491
  -15,084
  -15,689
  -16,309
  -16,950
  -17,613
  -18,304
  -19,026
  -19,782
  -20,576
  -21,410
  -22,288
  -23,214
  -24,189
  -25,219
  -26,305
  -27,451
Cash from investing activities, $m
  -9,568
  -10,887
  -12,276
  -13,723
  -15,226
  -16,779
  -18,381
  -20,032
  -21,732
  -23,483
  -25,283
  -27,139
  -29,054
  -31,029
  -33,072
  -35,185
  -37,374
  -39,646
  -42,004
  -44,456
  -47,008
  -49,667
  -52,439
  -55,331
  -58,350
  -61,505
  -64,801
  -68,250
  -71,858
  -75,634
Free cash flow, $m
  109
  1,193
  2,441
  3,860
  5,450
  7,209
  9,134
  11,219
  13,460
  15,854
  18,201
  20,886
  23,711
  26,674
  29,774
  33,010
  36,384
  39,897
  43,551
  47,351
  51,300
  55,405
  59,673
  64,110
  68,724
  73,526
  78,524
  83,729
  89,154
  94,809
Issuance/(repayment) of debt, $m
  6,445
  7,131
  7,824
  8,507
  9,177
  9,832
  10,472
  11,096
  11,708
  12,309
  12,902
  13,491
  14,079
  14,672
  15,272
  15,885
  16,513
  17,161
  17,834
  18,533
  19,264
  20,029
  20,833
  21,677
  22,567
  23,504
  24,492
  25,534
  26,633
  27,794
Issuance/(repurchase) of shares, $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 from financing (excl. dividends), $m  
  6,445
  7,131
  7,824
  8,507
  9,177
  9,832
  10,472
  11,096
  11,708
  12,309
  12,902
  13,491
  14,079
  14,672
  15,272
  15,885
  16,513
  17,161
  17,834
  18,533
  19,264
  20,029
  20,833
  21,677
  22,567
  23,504
  24,492
  25,534
  26,633
  27,794
Total cash flow (excl. dividends), $m
  6,554
  8,323
  10,264
  12,367
  14,627
  17,042
  19,605
  22,315
  25,168
  28,162
  31,103
  34,376
  37,790
  41,346
  45,046
  48,895
  52,897
  57,058
  61,385
  65,884
  70,564
  75,435
  80,505
  85,787
  91,291
  97,029
  103,016
  109,263
  115,787
  122,602
Retained Cash Flow (-), $m
  -3,185
  -3,528
  -3,871
  -4,209
  -4,541
  -4,865
  -5,181
  -5,490
  -5,793
  -6,090
  -6,383
  -6,675
  -6,966
  -7,259
  -7,556
  -7,859
  -8,170
  -8,491
  -8,823
  -9,170
  -9,531
  -9,910
  -10,307
  -10,725
  -11,165
  -11,629
  -12,118
  -12,633
  -13,177
  -13,751
Prev. year cash balance distribution, $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 flow adjustment, $m
  181
  217
  257
  300
  347
  399
  453
  512
  573
  639
  707
  779
  854
  933
  1,014
  1,099
  1,188
  1,280
  1,375
  1,475
  1,578
  1,685
  1,797
  1,913
  2,034
  2,159
  2,290
  2,427
  2,569
  2,717
Cash available for distribution, $m
  3,369
  4,795
  6,393
  8,158
  10,087
  12,177
  14,424
  16,825
  19,375
  22,072
  24,720
  27,702
  30,824
  34,087
  37,490
  41,036
  44,727
  48,567
  52,561
  56,714
  61,033
  65,525
  70,198
  75,062
  80,126
  85,401
  90,898
  96,630
  102,610
  108,851
Discount rate, %
  5.30
  5.57
  5.84
  6.14
  6.44
  6.76
  7.10
  7.46
  7.83
  8.22
  8.63
  9.06
  9.52
  9.99
  10.49
  11.02
  11.57
  12.15
  12.76
  13.39
  14.06
  14.77
  15.50
  16.28
  17.09
  17.95
  18.85
  19.79
  20.78
  21.82
PV of cash for distribution, $m
  3,199
  4,303
  5,392
  6,429
  7,382
  8,222
  8,923
  9,464
  9,831
  10,016
  9,942
  9,779
  9,453
  8,983
  8,392
  7,706
  6,955
  6,168
  5,371
  4,592
  3,851
  3,166
  2,550
  2,011
  1,551
  1,168
  859
  616
  430
  292
Current shareholders' claim on cash, %
  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 21
Price to Sales 1
Price to Book 3.9
Price to Tangible Book
Price to Cash Flow 12.8
Price to Free Cash Flow -338.8
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 19.8% 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 5.3%, 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 $6983 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 5.4% 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 0.3%.

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 53.2%.

Life of production assets of 10 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 -3.7%. 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 267 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 $62.7 billion.

RELATED COMPANIES Price Int.Val. Rating
UPS United Parcel 112.07 83.03  sell
ATSG Air Transport 23.50 30.99  buy

COMPANY NEWS

▶ UPS In, FedEx Out For UBS   [Jul-18-18 07:35AM  Investing.com]
▶ UPS Pilots Keyless Deliveries In New York City   [Jul-17-18 04:44PM  Benzinga]
▶ UPS expanding partnership for 'smart access' in NYC   [03:09PM  American City Business Journals]
▶ UBS Changes Its Views on UPS, FedEx   [12:10PM  Investopedia]
▶ UPS & FedEx: Buy One, Skip the Other   [10:27AM  Barrons.com]
▶ Top 5 Things That Moved Markets This Past Week   [Jul-13-18 08:00PM  Investing.com]
▶ Construction: $1M in 'storage' and 'build-out' permits filed for FedEx   [Jul-12-18 03:12PM  American City Business Journals]
▶ Why UPS Stock Has Slumped So Far in 2018   [Jul-11-18 08:14AM  Motley Fool]
▶ Q2 Earnings Season In Focus   [Jul-10-18 10:29AM  Zacks]
▶ Why UPS Stock Can Rise 30%   [06:00AM  Investopedia]
▶ FedEx extends airport lease, plans $100M investment   [Jul-03-18 01:46PM  American City Business Journals]
▶ Top Mutual Fund Holders of FedEx (FDX)   [08:43AM  Investopedia]
▶ UPS, FedEx Shares Carry Upside   [Jul-02-18 02:11PM  Barrons.com]
▶ 3 Bear Trades for a Lackluster Summer   [12:35PM  InvestorPlace]
▶ Amazon Has a New Plan to Cut Its Shipping Costs   [Jun-29-18 11:56AM  Motley Fool]
▶ Faster delivery of nearly everything is the next big thing   [Jun-28-18 05:41PM  Associated Press]
▶ Amazon wants to deliver its own packages   [01:10PM  Yahoo Finance Video]
▶ Yahoo Finance Live: Market Movers - Jun 28th, 2018   [07:20AM  Yahoo Finance Video]
▶ Amazon Invites Startups to Help It Deliver   [06:42AM  Investopedia]
▶ [$$] Amazon Drives Deeper Into Package Delivery   [12:15AM  The Wall Street Journal]
▶ 5 Top Stock Trades for Tuesday Morning   [Jun-25-18 04:10PM  InvestorPlace]
▶ FedEx Corporation Gets Back on Track   [03:59PM  Motley Fool]
▶ Boeing Grabs Another Big Widebody Order   [09:30AM  Motley Fool]
▶ FedEx Eyes CapEx Increases In Air Cargo Delivery Segment   [06:44AM  The Wall Street Journal]
▶ [$$] Alibaba Is Undervalued   [12:01AM  Barrons.com]
▶ Trade of the Day: FedEx (FDX)   [09:09AM  InvestorPlace]
▶ How her shipping startup is winning the fight against Amazon   [08:55AM  American City Business Journals]
▶ Industrial buildings near PTI sell for $31.2 million   [07:30AM  American City Business Journals]
▶ Breaking: FedEx subsidiary in negotiations to move HQ to Gibson Guitar building   [Jun-20-18 05:14PM  American City Business Journals]
▶ Boeing Stock Rallies After Landing $6.6 Billion FedEx Deal   [04:02PM  Investor's Business Daily]
▶ Boeing Rises on $6.6 Billion Deal With FedEx   [11:07AM  TheStreet.com]
▶ 7 Founder-Led Companies to Own Forever   [10:27AM  InvestorPlace]
▶ FedEx orders 24 Boeing widebody freighters worth $6.6 billion at list   [08:41AM  American City Business Journals]
▶ Can FedEx (FDX) Take Off After Earnings?   [03:29AM  Investopedia]
▶ FedEx orders 24 Boeing widebody freighters worth $6.6 billion at list   [07:43PM  American City Business Journals]
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