Morningstar Rating

Stock Research and Analysis

by Keith Schoonmaker, CFA

Bulls Say

FedEx's huge air fleet, 50,000 drop boxes, and global operations knit together a massive presence unlikely to be replicated except by its few current competitors.
In addition to ground growth, resumption of higher margins in LTL and international express businesses should boost revenue growth and consolidated operating margins, assuming some boost in international volume over current levels.
During its four-decade history, FedEx has weathered multiple economic cycles and oil supply crises. While short-term results may suffer, the firm's powerful network is here to stay. Read more 

Bears Say

Although critical to growth, a high level of international exposure makes the firm vulnerable to downturns in global trade and political interference.
Operating one of the world's largest airlines is a highly capital-intensive endeavor, and air freighter replenishment will demand substantial capital expenditures during the next several years.
While fuel surcharges buffer much of the impact of rapid jet fuel and diesel price shocks, FedEx remains highly exposed to the price of crude oil. Read more 

Management

Fred Smith, FedEx's founder and the inventor of overnight national delivery, remains at the helm of a largely independent board that has guided the firm through years of growth and profitability. As chairman, president, and CEO, Smith received $12.6   Read more 

Profile

FedEx, which pioneered overnight delivery in 1973 and remains the world's largest express delivery firm, derives about 60% of its $45 billion top line from its express division.  Read more 

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