As of May 23, 2025, FedEx Corp's estimated intrinsic value ranges from $235.60 to $781.25 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $309.41 | +41.4% |
| Discounted Cash Flow (5Y) | $308.56 | +41.0% |
| Dividend Discount Model (Multi-Stage) | $235.60 | +7.7% |
| Dividend Discount Model (Stable) | $252.97 | +15.6% |
| Earnings Power Value | $781.25 | +257.0% |
Is FedEx Corp (FDX) undervalued or overvalued?
With the current market price at $218.81, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate FedEx Corp's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.89 | 1.01 |
| Cost of equity | 8.0% | 10.5% |
| Cost of debt | 4.0% | 4.8% |
| Tax rate | 24.7% | 25.8% |
| Debt/Equity ratio | 0.37 | 0.37 |
| After-tax WACC | 6.6% | 8.6% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $309 | $88,938M | 81.6% |
| 10-Year Growth | $309 | $89,140M | 64.5% |
| 5-Year EBITDA | $303 | $87,685M | 81.4% |
| 10-Year EBITDA | $309 | $88,946M | 64.5% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $15,175M |
| Discount Rate (WACC) | 8.6% - 6.6% |
| Enterprise Value | $175,583M - $228,805M |
| Net Debt | $15,006M |
| Equity Value | $160,577M - $213,799M |
| Outstanding Shares | 240M |
| Fair Value | $670 - $892 |
| Selected Fair Value | $781.25 |
| Metric | Value |
|---|---|
| Market Capitalization | $52427M |
| Enterprise Value | $67433M |
| Trailing P/E | 13.38 |
| Forward P/E | 12.10 |
| Trailing EV/EBITDA | 7.45 |
| Current Dividend Yield | 239.68% |
| Dividend Growth Rate (5Y) | 16.69% |
| Debt-to-Equity Ratio | 0.37 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $92.82 |
| Discounted Cash Flow (5Y) | 25% | $77.14 |
| Dividend Discount Model (Multi-Stage) | 20% | $47.12 |
| Dividend Discount Model (Stable) | 15% | $37.94 |
| Earnings Power Value | 10% | $78.13 |
| Weighted Average | 100% | $333.15 |
Based on our comprehensive valuation analysis, FedEx Corp's weighted average intrinsic value is $333.15, which is approximately 52.3% above the current market price of $218.81.
Key investment considerations:
Given these factors, we believe FedEx Corp is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.