Core Insights - FedEx's stock performance has shown resilience, with a recent increase of +1.25% to $241.15, outperforming the S&P 500's daily gain of 0.79% [1] - The upcoming earnings disclosure is anticipated to reveal an EPS of $3.99, reflecting a 1.48% decline year-over-year, while revenue is expected to rise by 4.18% to $22.89 billion [2] - For the entire fiscal year, earnings are projected at $17.93 per share, indicating a -1.43% change, with revenue expected to reach $91.81 billion, marking a +4.42% increase [3] Analyst Estimates and Market Sentiment - Recent adjustments to analyst estimates for FedEx are crucial, as upward revisions indicate positive sentiment regarding the company's operational performance [4] - The Zacks Rank system, which evaluates estimate changes, currently assigns FedEx a rank of 4 (Sell), reflecting a 0.47% decrease in the consensus EPS projection over the past 30 days [6] Valuation Metrics - FedEx is trading at a Forward P/E ratio of 13.28, which is lower than the industry average of 13.47, suggesting a valuation discount [7] - The company has a PEG ratio of 1.33, compared to the industry average of 1.61, indicating a more favorable valuation relative to expected earnings growth [8] Industry Context - The Transportation - Air Freight and Cargo industry, which includes FedEx, is currently ranked 231 out of over 250 industries, placing it in the bottom 7% of the Zacks Industry Rank [9]

Group 1 - The market is currently favoring expensive stocks, with the S&P 500 trading at a forward PE of 25.5, indicating a preference for higher valuations [2] - This high valuation is not representative of most stocks, suggesting a divergence in market performance [2] Group 2 - iREIT+HOYA Capital focuses on income-producing asset classes, aiming for sustainable portfolio income, diversification, and inflation hedging [1]

Group 1 - The market is currently favoring expensive stocks, with the S&P 500 trading at a forward PE of 25.5, indicating a preference for higher valuation stocks [2] - It is noted that the high valuation of the S&P 500 does not represent the majority of stocks in the market, suggesting a divergence in stock performance [2] Group 2 - iREIT+HOYA Capital focuses on income-producing asset classes that provide sustainable portfolio income, diversification, and inflation hedging [1]

Group 1: Fund Performance - Longleaf Partners Fund returned -0.33% in Q3 2025, underperforming the S&P 500's 8.12% and the Russell 1000 Value's 5.33% [1] - The firm is dissatisfied with the portfolio's flat performance, focusing on investments in real assets and brands that generate growing free cash flow (FCF) per share [1] - The fund anticipates that its ~10x FCF multiple could rise to the mid-teens as management implements strategies to improve margins and increase share repurchases [1] Group 2: FedEx Corporation Overview - FedEx Corporation (NYSE:FDX) had a one-month return of 1.44% and a 52-week loss of 11.34%, closing at $238.17 per share with a market capitalization of $56.925 billion on October 23, 2025 [2] - The company is focused on operational improvements despite a challenging macro environment, with expectations for significant value realization from the separation of its Freight unit next year [3] Group 3: Investment Sentiment - FedEx Corporation is not among the 30 most popular stocks among hedge funds, with 67 hedge fund portfolios holding the stock at the end of Q2 2025, up from 62 in the previous quarter [4] - The company's revenue increased by 3% year-over-year, driven by strength in U.S. domestic package services [4] - While FedEx shows potential as an investment, certain AI stocks are considered to offer greater upside potential and less downside risk [4]

Core Insights - FedEx discontinued its partnership with Amazon in 2019 due to Amazon becoming a competitor in the last-mile delivery space [1] - Walmart is expanding its last-mile delivery capabilities through its app "Spark" and partnerships with gig economy workers [2] - Walmart is utilizing other last-mile carriers like Roadie and DoorDash, and is shifting intercity transportation to OnTrac to reduce costs [3] FedEx's Challenges - FedEx needs to reinvent its B2C delivery model to compete effectively, as its current B2B-focused network is not cost-effective for B2C deliveries [3] - The consumer preference for low-cost delivery options means that brand recognition is less important in the B2C market [4] - FedEx's contractor model, designed for larger B2B packages, incurs higher costs for smaller B2C parcels [5] Competitive Landscape - UPS faces challenges in the lightweight B2C parcel market due to high labor costs associated with its unionized workforce [6] - FedEx's contracted driver costs are lower than UPS, but it still struggles to compete with gig-based carriers that utilize crowd-sourced drivers [6]

Summary of Key Points from the Conference Call Industry Overview: Global Logistics Core Insights and Arguments - **Deceleration in Demand**: Signs of deceleration in ocean and air freight demand are emerging as ocean volume growth slowed to +3% globally in August, with a significant decline of -12% in Transpacific Eastbound volumes [1][3]. Air freight volumes also showed a modest deceleration in September, likely due to the expiration of the de minimis exemption [5][23]. - **Pressure on Ocean Rates**: Ocean freight rates are at their lowest levels since 2023, with the SCFI down over 50% year-to-date [3][20]. Key indicators such as the SCFI and WCI have seen declines of 54% and 58% respectively [20]. - **Orderbook Expansion**: The container shipping orderbook grew by +6% in Q3, with new orders equivalent to 3.4% of the in-service fleet, indicating continued investment despite oversupply risks [4][21]. - **Airfreight Performance**: Airfreight demand grew by 4% in August, but the growth rate moderated in September, with revenues below last year's levels [5][23]. The expiration of the US de minimis exemption is expected to impact future demand [23]. - **Surface Freight Outlook**: U.S. surface rates contracted in June and are expected to remain flat or decline in the second half of the year due to a softer freight outlook [6][24]. Additional Important Insights - **Global Trade Volumes**: Global trade volumes increased by 4.9% YoY in July, driven by a 6% rise in emerging market exports, while U.S. and European exports remained largely unchanged [2][18]. - **PMI Indicators**: September PMIs showed an increase in China (+0.7pt to 51.2) and the U.S. (+0.4pt to 49.1), while Europe saw a decrease for the first time this year (-0.9pt to 49.8) [2][18]. - **Market Sentiment**: The sentiment in the logistics sector remains weak, with companies expressing pessimism regarding international ocean demand and potential challenges in achieving a meaningful peak season [3][19]. Company Ratings and Valuations Key Company Ratings - **DSV**: Rated Outperform with a target price of DKK 1,700. Expected to become the largest freight forwarder post-acquisition of DB Schenker [9]. - **DHL**: Rated Outperform with a target price of €42.00. Strongly levered to e-commerce and world trade, with a solid long-term holding outlook [10]. - **Kuehne+Nagel**: Rated Market-Perform with a target price of CHF 165. Underperformance in volume growth noted, with execution issues impacting investor sentiment [11]. - **AP Moller - Maersk**: Rated Underperform with a target price of DKK 10,600. Facing challenges in container shipping with declining spot rates and a high orderbook [12]. Valuation Comparisons - **Valuation Metrics**: DSV shows a strong growth trajectory with an expected EPS of DKK 100+ by 2028, while Maersk's strategy has been criticized for failing to deliver promised synergies [9][12]. - **Market Cap and Share Buybacks**: DSV is projected to repurchase DKK 24 billion of shares annually, compared to its current market cap of DKK 310,654 million [9]. Conclusion The global logistics industry is experiencing a notable deceleration in demand across both ocean and air freight sectors, with significant pressure on rates and a growing orderbook despite oversupply risks. Companies like DSV and DHL are positioned favorably, while others like Maersk face challenges. The overall sentiment in the logistics sector remains cautious as companies navigate a complex market landscape.

Core Insights - FedEx announced the addition of five new weekly cargo flights connecting China and Paris, France, to enhance its global network coverage and support trade between Asia and Europe [1][2] - The new flights will help Asian businesses connect more quickly and reliably to European markets, especially during the peak holiday shopping season [1] - The flights will operate from FedEx's major hubs in Guangzhou and Shanghai, using Boeing 777 freighters to link to the FedEx European hub at Charles de Gaulle Airport in Paris [1] Group 1 - The new flights reflect FedEx's commitment to promoting trade development between Asia and Europe, facilitating logistics for sectors such as e-commerce, manufacturing, high-tech, and retail [1] - In the first half of this year, China's total import and export volume with the EU reached 2.82 trillion yuan, a year-on-year increase of 3.5%, with the EU remaining China's second-largest trading partner [1] - The integration of supply chains between China and Europe is accelerating, with significant growth in exports of automotive parts, textiles, home appliances, and laptops from China to the EU [1] Group 2 - FedEx's China President highlighted the increasing importance of the European market in the global strategies of Chinese companies, emphasizing the need for enhanced logistics capabilities [2] - With the new flights, FedEx now operates 26 weekly flights from the Asia-Pacific region to Europe, with delivery times as fast as 48 hours to major European markets [2] - FedEx has established a robust logistics network in China with six operational centers and three major air logistics hubs in Europe, further strengthened by the recent opening of the Istanbul global air hub [2]

Core Viewpoint - FedEx Corporation (NYSE: FDX) has shown resilience despite a challenging macroeconomic environment, leading to a buy rating initiated in late July due to significant valuation opportunities [1] Company Summary - The stock of FedEx has been positively impacted since the buy rating was issued, indicating investor confidence in the company's performance [1] Analyst Background - The analyst has a strong focus on the tech sector and holds a Bachelor of Commerce Degree with Distinction, majoring in Finance, which supports the credibility of the analysis [1]

Core Insights - FedEx Corporation (FDX) and Westinghouse Air Brake Technologies Corporation (WAB) have both announced dividend increases this year, demonstrating a commitment to shareholder returns despite economic uncertainties [1][10]. Dividend Increases - Wabtec's board approved a 25% dividend hike, raising its quarterly cash dividend to $0.25 per share ($1.00 annualized) from $0.20 ($0.80 annualized) [3]. - FedEx's board approved a dividend increase, raising its quarterly cash dividend to $1.45 per share ($5.80 annualized) from $1.38 ($5.52 annualized) [3]. Price Performance Comparison - WAB has achieved a 2.4% year-to-date gain, while FDX has experienced a double-digit decline [5]. - FDX's poor performance is attributed to revenue weakness due to geopolitical uncertainty and high inflation affecting consumer sentiment and growth expectations [8]. - WAB's strength is linked to its focus on new technologies, restructuring actions, and cost-cutting initiatives [9]. Earnings Estimates - The Zacks Consensus Estimate for WAB's 2025 and 2026 sales indicates year-over-year increases of 6.7% and 5.8%, respectively, with EPS estimates trending upward [13]. - The Zacks Consensus Estimate for FDX's current year sales implies a 4.4% year-over-year increase, but EPS estimates have been trending downward [14]. Valuation Comparison - WAB is trading at a forward sales multiple of 2.85, above its 5-year median of 2.07, indicating a higher valuation [15]. - FDX has a forward sales multiple of 0.58, below its 5-year median of 0.69, and carries a Value Score of A, while WAB has a Value Score of D [15]. Conclusion - WAB's better price performance and upward earnings estimate revisions suggest a stronger position compared to FDX, which is currently ranked lower [17][18].

Core Insights - FedEx Corporation is a global leader in logistics and transportation, operating the world's largest cargo airline and managing a fleet of over 200,000 vehicles and nearly 700 aircraft, handling over 16 million shipments daily [1][2] Financial Performance - FedEx reported strong fiscal Q1 results on September 18, 2025, with adjusted EPS of $3.83, surpassing estimates of $3.66, marking a 6.4% year-over-year increase [5] - Revenue reached $22.2 billion, exceeding forecasts of $21.9 billion, reflecting a 2.8% growth from the prior year, driven by robust U.S. domestic package volume and pricing strength [5] - Operating income rose 7.4% year-over-year to $1.3 billion, supported by $200 million in transformation savings, while net income increased to $824 million from $794 million a year earlier [6] - The company ended the quarter with $6.2 billion in cash and equivalents, maintaining strong liquidity while repurchasing $500 million in shares and declaring a quarterly dividend of $1.45 per share [6] Future Outlook - FedEx reiterated its full-year 2026 guidance, expecting adjusted EPS between $17.20 and $19.00, alongside projected revenue growth of 4% to 6% [7] - The company expressed confidence in continued cost optimization and pricing power while navigating trade headwinds and investing in network transformation programs [7] Stock Performance - FedEx stock has struggled recently, falling 8.1% over the last five days and 0.3% in the past month, with a year-to-date performance down about 20% and a 52-week loss close to 15% [3] - In contrast, the S&P 500 Index has gained roughly 14% year-to-date, indicating significant underperformance by FedEx [3]