FedEx (NYSE: FDX)
Quality Value Investing Research Report | $FDX Updated Coverage | October 2024
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In this updated coverage research report, we’ll reexamine the industrials sector holding, FedEx Corporation FDX 0.00%↑, to see if it continues to meet Quality Value Investing’s Real-Time Stock Picks investment criteria based on our proprietary checklist analysis of the business’s current wealth and its stock’s present value.
FedEx: Company Current Wealth
Value Proposition
FedEx Corporation (NYSE: FDX) is a dividend-paying large-cap stock in the industrials sector’s air freight and logistics industry. It was added to the QVI Real-Time Stock Picks on February 2, 2022, at a cost basis of $235.45 a share, adjusted for dividends paid to cash.
FedEx Corporation offers transportation, e-commerce, and business services globally, operating through the Federal Express and FedEx Freight segments. It provides express shipping, freight, LTL, time-sensitive shipping, and small-package delivery. The company also delivers e-commerce solutions, dataworks, printing, shipping management, packing, document services, retail package access, logistics, customs brokerage, trade tools, and door-to-door solutions. Additionally, it offers third-party logistics, warehousing, distribution, fulfillment, returns, repair, and related services. Founded in 1971, the company is based in Memphis, Tennessee, USA.
Economic Moat
Morningstar assigns FedEx a narrow moat rating based on its flagship express and ground package delivery services, which benefit from significant competitive advantages rooted in cost efficiency and economies of scale.
QVI’s Value Proposition Elevator Pitch for FedEx:
FedEx remains a strong player in the air freight and logistics industry despite challenges that led founder and longtime CEO Fred Smith to step down and become executive chairman.
QVI’s value proposition rating for FedEx: Bullish.
Returns on Management
Revenue Growth and Profit Margins
According to the checklist table below, FedEx’s trailing five-year annualized revenue growth was in the mid single digits and lagged behind the S&P 500's median growth of +15.7%. Notably, the company’s topline growth was flat at 1.1% compared to 18.2% for the broader market during the most recent twelve months.
Farther down the income statement, FedEx’s mid-single-digit net profit margin underperformed the broader market’s median net margin of +22.8%.
Returns on Equity and Invested Capital
FedEx’s senior management achieved a double-digit return on equity, or ROE, in line with QVI’s targeted threshold, but it underperformed the market’s median ROE of +49.1%.
Stock buyback programs often boost ROE. For example, FedEx has an active buyback program, with the board authorizing a $5 billion program in March 2024, along with a remaining balance from a previous one. The company has completed a large part of these repurchases, returning about $3.0 billion to shareholders in fiscal 2025, and it plans to continue its strong program in fiscal 2026.
FedEx’s return on invested capital, or ROIC, dropped below QVI’s threshold and underperformed the broader market’s median ROIC of +25.2%. Additionally, FedEx’s ROIC did not surpass its weighted average cost of capital, or WACC, suggesting that its senior executives are facing challenges with capital allocation.
Owners’ Earnings
In an additional test of management effectiveness, the five-year trailing cumulative wealth of owners’ earnings for FDX, or EPS growth plus dividend rate growth annualized, was in the high double digits, indicating a superior return to shareholders.
If using free cash flow growth instead of EPS growth, FedEx’s owners’ earnings would still be a highly respectable 35.31%.
QVI’s business fundamentals rating for FedEx Corp.: Neutral.
Next, we will review the company’s enterprise downside risks, the present value of the stock—including shareholder yields, valuation, and downside risks—and the investment thesis, all exclusive to Quality Value Investing’s premium (paying) subscribers.
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Unless noted, all data presented is sourced from Charles Schwab & Co., FedEx Corporation, Google Finance, GuruFocus, and Yahoo Finance as of the market close on October 20, 2025, and is intended for illustration purposes only.
Disclosure: As of the date of this research report, I/we hold no beneficial positions in FDX common shares in our family portfolio. I wrote this report myself, and it expresses my own opinions. I am not receiving compensation for it other than from Substack paid subscriptions. I have no business relationship with any company whose stock is mentioned in this post.
Additional Disclosure: Quality Value Investing by David J. Waldron’s primary ticker research reports are for informational purposes only. The accuracy of the data cannot be guaranteed. Narrative and analytics are impersonal, meaning they are not tailored to individual needs or intended for portfolio construction beyond The QVI Real-Time Stock Picks, which is presented solely for educational purposes. David is a private investor and author, not an investment adviser. Readers should always engage in independent research or due diligence and, as appropriate, consider consulting a fee-only certified financial planner, a licensed discount broker/dealer, a flat fee registered investment adviser, a certified public accountant, or a specialized attorney before making any investment, income tax, or estate planning decisions.
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