Skip to Content

FedEx Corp FDX

Rating as of

Morningstar’s Analysis

Valuation
Currency in USD
Is it the right time to buy or sell?
Find out with Morningstar Premium
Is it the right time to buy or sell?
Find out with Morningstar Premium

1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Pricing Still Robust, but FedEx’s Fiscal First-Quarter Ground Margins Hit Hard by Labor Constraints

Matthew Young, CFA Equity Analyst

Analyst Note

| Matthew Young, CFA |

While labor constraints weighed heavily on margins, strong pricing conditions persisted in FedEx’s fiscal first-quarter 2022 (ended in August), with revenue up 14% year over year. Consolidated top-line growth came in slightly below our expected run rate due to noise from the onset of very tough B2C volume comparisons and labor-related limitations, especially at ground. Total ground package volume fell 2% year over year, versus 23% growth for all of fiscal 2021 (ended in May). Despite tough comps, however, we suspect residential package-delivery demand remains healthy given rising levels of e-commerce, and B2B activity has posted solid recovery (ground’s commercial volumes rose 12%). At express, solid export package demand continued to bolster international-priority volumes (up 11%). For the LTL division (freight), heavy retailer restocking and strong yield gains once again drove impressive top-line growth (23%).

Read Full Analysis

Company Profile

Business Description

FedEx pioneered overnight delivery in 1973 and remains the world's largest "express" package provider. In its fiscal 2020 (ended May 2020), FedEx derived 51% of revenue from its express division, 33% from ground, and 10% from freight; its asset-based less-than-truckload shipping segment. The remainder comes from other services, including FedEx Office, which provides document production/shipping and FedEx Logistics, which provides global forwarding. FedEx acquired Dutch parcel delivery firm TNT Express in 2016. TNT was previously the fourth- largest global parcel-delivery provider.

Contact
942 South Shady Grove Road
Memphis, TN, 38120
T +1 901 818-7500
Sector Industrials
Industry Integrated Freight & Logistics
Most Recent Earnings May 31, 2021
Fiscal Year End May 31, 2021
Stock Type Cyclical
Employees 564,000

Related

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.