How FedEx’s Valuation Stacks up to Peers after Fiscal 1Q18
FedEx’s forward PE multiple of 17.2x is the lowest in the peer group, and analysts are pegging its next-one-year EPS (earnings per share) growth at 4.4%.
There was no mention of dividends in FedEx’s fiscal 1Q18 earnings conference call, and its stock buybacks were significantly lower ($86.0 million) in fiscal 1Q18.
In fiscal 1Q18, FedEx’s (FDX) incurred $1.04 billion in capital expenditure or capex, representing 6.8% of that quarter’s total revenues of $15.3 billion.
FedEx’s (FDX) fiscal 1Q18 overall operating margin fell to 7.3% from 8.6% in fiscal 1Q17 on a reported basis.
FedEx’s (FDX) Freight segment’s revenues grew 6% to ~$1.8 billion in fiscal 1Q18, up from nearly $1.7 billion in fiscal 1Q17.
FedEx’s (FDX) Ground segment saw its revenues grow 8.1% to $4.6 billion in fiscal 1Q18, up from $4.3 billion in fiscal 1Q17.
In fiscal 1Q18, FedEx’s (FDX) Express segment’s overall revenues totaled $8.6 billion, compared with $8.5 billion in fiscal 1Q17.
FedEx (FDX) reported revenues of $15.3 billion for fiscal 1Q18, missing the analysts’ expectation by 0.4%.
On September 19, 2017, FedEx (FDX) announced its fiscal 1Q18 results, reporting EPS (earnings per share) of $2.2, compared with the expected $3.0.
FedEx (FDX) now has a consensus mean rating of 1.85, denoting a “buy.”
Analysts are expecting a 12.1% rise in FDX’s adjusted earnings per share on a year-over-year basis.
In fiscal 2017, FedEx’s Express segment reported $34.8 billion in revenues, accounting for 57% of the company’s overall revenues of $63.3 billion.
FedEx plans for a ~$5.9 billion capital expenditure or capex in fiscal 2018. In fiscal 2017, it spent ~$5.1 billion on capex, accounting for 8.5% of total revenues.
For the next four quarters, analysts predict that FedEx’s operating margins will be 9.6%. Compared with its past four quarters, this is marginally higher.
Reuters’ survey of FedEx’s (FDX) analysts for fiscal 1Q18 revenues shows an estimate of $15.3 billion. FedEx saw revenues of $14.7 billion in fiscal 1Q17.
FedEx has returned ~34% to investors over the past year—much higher than United Parcel Service’s (UPS) 9.3% return during the same period.
Of the 27 analysts covering UPS, four analysts (14.8%) recommended a “strong buy” for UPS stock.
In 2Q17, United Parcel Service’s operating profit rose 8.7% to $2.2 billion from $2.0 billion in 2Q16.
In 2Q17, UPS’s Supply Chain and Freight vertical revenues reached $2.8 billion, up 12% from $2.5 billion in 2Q16.
UPS’s International Package volumes in 2Q17 rose 5.6% to 2.9 million average daily packages from 2.7 million average daily packages in 2Q16.