Is FedEx Corporation (FDX) overvalued or undervalued?
Updated Nov 10, 2026 · hand-researched model · educational, not advice
At a recent price of $318.84, FedEx Corporation (FDX) sits inside a range too wide to call either way: our valuation lenses put the business somewhere between $160.46 and $834.59 per share. They disagree too widely for us to state a single fair value. We publish the range rather than a midpoint because a number that precise would claim more than the methods can support. This is an educational model, not a price target or a recommendation.
The valuation discounts FedEx Corporation's projected free cash flows at a weighted-average cost of capital (WACC) of 10.3%, with a long-run terminal growth rate of 2.5%. About 72% of the enterprise value comes from the terminal value — the portion beyond the explicit forecast window — which is typical for a stable, cash-generative business and a reminder that small changes in the discount rate or terminal growth assumption swing the intrinsic value meaningfully.
Running the DCF in reverse — solving for the growth the current price already assumes — the market is implying roughly 9.0% annual revenue growth for FDX. Our base case instead compounds to about 4.0% a year over the same forecast, so the market is pricing in materially faster growth than our base case. The reverse-DCF is a quick sanity check: it reframes 'is this stock cheap?' as 'do I believe the growth the price requires?' rather than arguing over a single point estimate of fair value.
Sensitivity matters more than any single number. Across a reasonable band of discount-rate assumptions, FDX's modeled DCF value ranges from about $174.16 to $343.56 per share. If that range still sits below today's price, the market is optimistic relative to the model across the whole band; if it brackets the price, the stock is roughly fairly valued on our assumptions. Use the interactive slider to see exactly where your own cost-of-capital view lands.
How to read this page: the DCF fair value is what FedEx Corporation would be worth if its cash flows grow as modeled and are discounted at the stated WACC. The assumptions table shows every input and its source; the reverse-DCF shows what the market believes; the sensitivity band shows how fragile the answer is. None of this is investment advice — it is a transparent, auditable framework for forming your own view of FDX's intrinsic value. Figures update as new filings and prices come in.
The assumptions behind FDX's DCF
| Input | Value | Source |
|---|---|---|
| Base-year revenue | $82,463,000,000 | FedEx 8-K Ex-99.1 'Supplemental historical financial information' (accession 0001048911-26-000108, filed 2026-07-21) — calendar-year recast, FedEx Freight as discontinued operations: WHY THIS IS THE BASE AND NOT THE FY2026 10-K. FedEx spun off FedEx Freight on 2026-06-01 (80.1% distributed, one FDXF share per two FDX shares) and moved its fiscal year from May 31 to December 31 on the same day. The FY2026 10-K (year to 2026-05-31, revenue $94,720M) still consolidates Freight ($8,795M of revenue), which FDX holders no longer own except through the retained 19.9% stake valued separately in net debt. FedEx published this recast for exactly this purpose: calendar 2025 continuing operations, Freight as discontinued — Express U.S. Domestic $54,401M + Express International $25,337M + Corporate/other $2,725M = $82,463M (+4.2% on CY2024's $79,130M). It is also the stated baseline of management's CY2026 outlook (+~11% revenue), so the Year-1 guidance applies to this exact number. CAVEAT: the recast is unaudited supplemental information derived from audited statements, not a 10-K; the first audited ex-Freight annual figures arrive with the 10-KT for the June-December 2026 transition period. CROSS-CHECK: FY2026 Federal Express segment revenue was $82,273M (June 2025-May 2026), consistent with a ~$82-83B continuing business. |
| Base EBIT margin | 5.5% | FedEx 8-K Ex-99.1 'Supplemental historical financial information' (accession 0001048911-26-000108, filed 2026-07-21) — calendar-year recast, FedEx Freight as discontinued operations: GAAP operating income from continuing operations $4,554M / $82,463M = 5.52%. GAAP, so it INCLUDES $345M of business optimization costs, $21M impairment and $14M separation costs; on FedEx's own adjusted basis (adding those plus the $76M legal item listed in the CY2025 EPS reconciliation in the 2026-06-23 release) the margin is ~6.1%. EXCLUDES the $722M of 'other retirement plans income', which sits below operating income: $418M of it is the non-cash pension mark-to-market gain and the remainder is non-service pension income — neither is operating cash. NB: continuing operations carry ALL shared overhead previously allocated to Freight (the recast says these 'stranded costs' stay with FedEx until transition-services income and cuts offset them), so this base is, if anything, conservative. Quarterly shape is strongly peak-weighted: Q4 2025 margin 8.3% vs 4.0% in Q1. |
| Forecast revenue growth | 11% → 2% → 2% → 2% → 2% | Assumption — TickerWorth's 5-year explicit forecast |
| Risk-free rate | 5.2% | US 10Y Treasury constant maturity (FRED DGS10): 5.24% on 2026-10-01, the latest published observation; program-wide rate shared by every researched model. |
| Beta | 1.33 | yfinance 5Y-monthly beta: Published beta 1.328, used as-is (rounded). Known contamination: ~56 of the ~60 monthly observations are pre-spin, when FDX included the LTL business, so the figure describes the old FedEx. Direction unknown, so not normalized. It is HIGH next to UPS's published 1.05, and it is the single biggest lever: beta 1.1 gives ~$266/share, 1.0 gives ~$284, and the price needs ~0.97 under every other input here. |
| Terminal growth | 2.5% | Assumption — house default: House default 2.5% (about long-run nominal GDP). Reasonable for a mature parcel network whose volume tracks industrial production and e-commerce; 2.0% takes ~$12/share off. Must stay below WACC of ~10.26%. |
| Diluted shares | 241M | FedEx Q4 FY2026 earnings release + CY2026 outlook, 8-K Ex-99.1 (accession 0001048911-26-000050, filed 2026-06-23): Q4 FY2026 (Mar-May 2026) weighted-average diluted shares, 241M (FY2026: 239M) — the latest quarterly diluted count; FedEx reports it in whole millions. It PREDATES the June buybacks ($0.3B open market + a $1.0B ASR completing by end-September), and is deliberately paired with the pre-buyback May-31 cash in net debt so the two stay consistent. For reference, shares outstanding were 236,581,188 on 2026-07-16 (10-K cover). The spin did not change the FDX share count — it handed out FDXF shares. |
| Market price | $318.84 | Delayed quote · as of 2026-11-10 05:00 UTC |
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