QS Research · Michael Burry's Scion Capital analyst template · 2006
FEDEX CORP (FDX)
As of 2026-11-11 · 12/15 boxes filled from SEC filings and market data
Report price $319.48 (close 2026-11-10)
Conclusion: LONG
Conviction medium · base case +149% · downside -24% · upside +176%
At $319.48, FDX trades at 6.5x TTM EV/EBITDA, 0.68x EV/Sales, a 6.6% FCF yield and $7.45B net cash [N29,N28,N33,N24], while the 8.7x headline P/E is distorted by $4.44B of non-operating items, 43% of pre-tax income, leaving a 14.5x operating tax-normalized P/E [N39]. The code's independent base anchor is the peer median 21.7x P/E, or $796.86 / +149% [N61]; a 24.0x upside on the 2026-10-28 raised CY2026 adjusted EPS guide and the Jan 4 2027 5.9% rate increase gives 24.0x/8.7x - 1 = +176% [S102,S5], and the downside is (8.7x x 0.85 x 0.90)/8.7x - 1 = -23.5% on a 10% operating-earnings cut. The market is focused on fuel, wage and stranded spin-off costs and on the GAAP noise from the retained FedEx Freight stake, not on the $4.90B FCF and Network 2.0 savings [N18,S102,S29]. The upside assumes a re-rate to 24.0x P/E, supported by the dated 2026-10-28 guidance raise and the 2027-01-04 rate increase, so the risk/reward supports a long.
Key numbers
- Share price: $319.48
- Market cap: $74.82B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $98.47B
- EV / EBITDA (TTM): 6.5x
- P/E (TTM): 8.7x
- FCF yield: 6.6%
- Price / book: 2.16x
- Earnings-quality flags (TTM): none flagged
- P/E, operating (tax-normalized) (TTM): 14.5x
- EV / FCF (TTM): 13.7x
- Revenue growth (latest fiscal year): +7.7%
- ROIC (TTM): 12.3%
- WACC: 9.0%
- Economic profit spread: +3.4 pts
The 15 boxes
- ✓ 1. Long-form business notes
The sources show FDX as a capital-intensive transportation business with FY2026 revenue of $94.72B and TTM to 2026-09-30 revenue of $98.47B, but the provided excerpts do not give segment revenue or unit economics. Between FY2021 and FY2026 revenue rose while operating income and net income to common fell, capex was cut and buybacks reduced diluted shares. The latest 10-K excerpt centers on the June 1, 2026 FedEx Freight Spin-Off, Network 2.0 integration of Federal Express and legacy FedEx Ground, 2029 targets and the InPost investment.
- ✓ 2. Competitive advantage
FedEx competes in markets its own 10-K calls "highly competitive and sensitive to price and service," against UPS, USPS, DHL, DPD, GLS, regional and crowdsourced carriers, and increasingly against Amazon, which now runs its own hubs, aircraft, vehicles and offers delivery to third parties. The margin record is thin and has not recovered: operating income $6.25B in FY2022 fell to $4.91B in FY2023 and was $5.46B in FY2026 and $5.95B TTM to 2026-09-30, i.e., roughly 5.5%-6.0% operating margins in FY2023-FY2026 versus 6.7% in FY2022. The durable assets that show up in the documents are scale and network reach (revenue $98.47B TTM; app in 220+ countries), brand standing (18th on FORTUNE's 2026 list, 26th straight year in the top 20), route/licence barriers to entry, and cash generation ($8.93B operating cash flow in FY2026 against $3.81B capex). The threat is structural: price-sensitive customers, subsidised international rivals, and Amazon as both customer and competitor.
- ✓ 3. 10-Q takeaways
The 10-Q shows revenue growth of 12% in the three-month period ended September 30, 2026 and 14% in the four-month period, with consolidated operating margin 4.7% (down 10 bp) and 5.3% (up 110 bp), respectively. Reported net income is distorted by FedEx Freight-related one-offs: a $1.2 billion non-deductible loss in the three-month period and a $3.3 billion non-taxable gain in the four-month period, so operating income is the cleaner measure. Cash fell to $8.0 billion, buybacks totaled $0.7 billion/$2.0 billion, and management gave numeric CY2026 capex and cost-savings outlook; Item 1A reports no material risk-factor changes.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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