FedEx Corporation (FDX) : our fundamental analysis
2026-06-22 · By Lubin Danilo, founder of Lubin Investment
FedEx reports its annual results on June 23, 2026. My fundamental view is cautious: profitability stays low, revenue has been flat for five years, and the stock, at about 326 dollars, looks too expensive to me. I would only buy this share around 160 dollars.
- FedEx reports its fourth-quarter fiscal 2026 results on June 23, that is tomorrow.
- Analyst consensus expects earnings per share near 3.70 dollars and revenue around 21.7 billion dollars.
- In my method, FedEx scores 3 out of 10 for quality: weak profitability, declining growth and heavy debt.
- At about 326 dollars, the stock is valued at 18.8 times its free cash flow, a level I find too high.
- My reasonable buy price sits around 160 dollars, well below the current price.
Results due on June 23, 2026
FedEx reports tomorrow, June 23, 2026, the numbers for the fourth quarter of its shifted fiscal year 2026. It is a closely watched event, because the carrier often acts as a barometer of global trade: when parcel volumes slow down, the whole economy sends a signal.
Analysts expect earnings per share of about 3.70 dollars and revenue close to 21.7 billion dollars. The market will focus on two things above all: the margin generated by the express division, which is in the middle of a reorganization, and the outlook given for the next fiscal year. A single release can move the stock by several percent in one session, in either direction.
My job is not to guess tomorrow's market reaction. I care about how solid the company is over the long run, not the bet of a single quarter. So here is what FedEx's fundamentals say, regardless of the figure that lands tomorrow morning.
What our fundamental analysis reveals
At Lubin Investment, every company gets a quality score out of 10. That score is the sum of ten fundamental criteria I check one by one: profitability, the steadiness of growth, the level of debt, the ability to generate cash, and more. The more boxes a company ticks, the higher the score climbs. FedEx scores 3 out of 10. That is weak, and the table below explains why.
| Criterion | FedEx | My target |
|---|---|---|
| Free cash flow margin | 4.6% | above 10% |
| Revenue growth over 5 years | -0.6% per year | positive and steady |
| Net margin | 4.9% | high and stable |
| Return on capital (Cash ROCE) | 6.5% | above 15% |
| Net debt to free cash flow | 4.11 times | below 3 times |
Why is profitability a problem?
The free cash flow margin measures what truly remains for the company after paying for its capital investments. At FedEx it is only 4.6%, whereas I look for at least 10%. The transport business demands trucks, planes and very costly sorting hubs: these heavy outlays eat into cash every year. Return on capital, at 6.5%, confirms the diagnosis: the company earns little compared with the money it ties up in assets.
Is growth there?
No. Over the past five years, revenue has declined by an average of 0.6% per year. In other words, FedEx now sells barely more, if not slightly less, than it did five years ago. Competition from UPS, Amazon moving into delivery and sustained price pressure partly explain this stagnation. A company that does not grow has a hard time justifying a generous valuation.
Is the debt under control?
Net debt equals 4.11 times annual free cash flow. I prefer to stay below 3 times. In plain terms, it would take FedEx more than four full years of free cash to repay what it owes. It is not alarming in the short term, but it narrows the room for maneuver, especially if volumes were to slow down.
The valuation of the FDX share
To judge the price, I use the P/FCF, which stands for Price to Free Cash Flow: the share price divided by free cash flow per share. It works a bit like the well-known P/E ratio, but it is based on the cash actually available rather than accounting profit. The higher this figure, the more you pay for each dollar of cash the company generates.
At about 326 dollars, the FDX share is valued at 18.8 times its free cash flow. For a highly profitable, fast-growing company, that level would be acceptable. But for a carrier whose revenue is flat and whose profitability stays low, I find it too high. The market seems to be pricing in a turnaround that is, at this stage, not yet visible in the numbers.
The integrated logistics sector
FedEx operates in integrated logistics, a capital-intensive sector by nature: you have to own or lease a huge fleet and maintain it constantly. Margins are structurally thin and very sensitive to fuel prices and labor costs. It is an essential business, but rarely a place where you find the high returns I look for.
With a market capitalization of about 78.7 billion dollars, FedEx remains a solid and unavoidable giant. The ongoing cost-saving plan can improve margins over time. But as long as growth does not pick up and profitability does not clearly progress, the investment case stays fragile in my eyes.
Our target buy price
My model puts a reasonable buy price around 160 dollars. That is nearly half the current price. It is not a forecast of a fall, but the price at which the current fundamentals would, in my view, offer a real margin of safety. As long as the stock stays far from that level, I prefer to watch rather than buy.
You can review the full detail of my criteria and valuation on the dedicated page for the <a href="/analyse/FDX">FedEx (FDX) analysis</a>, updated with the latest available figures.
If you want to apply the same reading grid to another stock, you can run your own search from the <a href="/analyser">analyze a stock</a> page and get a quality score in a few seconds.
And for more company breakdowns before or after their results, the <a href="/blog">blog</a> gathers all of my analyses.
FAQ
When does FedEx report its results?
FedEx reports the results of the fourth quarter of its fiscal year 2026 on June 23, 2026. Consensus expects earnings per share of about 3.70 dollars and revenue close to 21.7 billion dollars.
Why does FedEx score 3 out of 10?
Because three weaknesses stand out clearly: a free cash flow margin of only 4.6%, revenue declining 0.6% per year over five years, and return on capital of 6.5%, far from my 15% target. Debt, at 4.11 times free cash flow, also weighs on the score.
Is the FDX share expensive today?
At about 326 dollars, it is valued at 18.8 times its free cash flow, a level I consider high for a company whose growth and profitability are weak.
At what price would the FedEx share become attractive?
My model puts a reasonable buy price around 160 dollars, well below the current price.
Should you buy FedEx before tomorrow's results?
Not according to my analysis. Tomorrow's release may move the stock, but it does not change the long-term fundamentals. At 326 dollars, the share remains far from my target price of 160 dollars.
Voir l'analyse FDX sur Lubin Investment
About the author
Written by Lubin Danilo, founder of Lubin Investment. A self-taught individual investor, I have analyzed stocks through their fundamentals for several years and invest my own money with this method. I codified it into a tool that judges a company's quality and its price separately, using criteria drawn from the financial literature (Warren Buffett, Michael Mauboussin, Aswath Damodaran).