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FedEx (FDX): analysis traps
Where its figures could mislead a reader, and what to check before taking them at face value · Data: Q1 FY27, to Sep 30, 2026, filed Oct 28, 2026; rules v1.1
FedEx (FDX): 0 rules of 10 triggered on the filings to Sep 30, 2026. 1 to review; 2 with insufficient data; 3 not applicable. Each is a question to verify, with the normal explanation that would produce the same figures.
Check these first
A precise DCF value = the true value To review · confidence high
The DCF's point value is 252.01 a share (price 316.80); 72% of it is the terminal value, a number about years no one has seen. Moving operating margin by ±3 pts alone takes it from 96.29 to 407.74; across every method the research ran the range is -564 to 1,379. The value is a range; the decimals are not information.
Innocent reading: A stable, mature business with a narrow range of outcomes, where the point value is a fair summary.
Every rule
A01 FCF growth = the business improved Not triggered confidence medium
Free cash flow rose $2.1B to $5.1B; working capital and lower capex explain 50% of it, so most of the gain is in operating cash flow itself.
The figures and how they are read
| Fiscal year before | FY25 |
| Fiscal year | FY26 |
| Operating cash flow, year before | $7.0B |
| Operating cash flow | $8.9B |
| Capex, year before | $4.1B |
| Capex | $3.8B |
| Free cash flow, year before | $3.0B |
| Free cash flow | $5.1B |
| Change in FCF | $2.1B |
| Change in capex | −$246M |
| Working capital: change in its cash contribution | $818M |
| Of which: capex cut | $246M |
| Of which: working capital released | $818M |
| Share of the increase that need not repeat | +49.8% |
| Operating cash flow before working capital: change | 1071000000.00 |
FCF = operating cash flow − cash capex; ΔFCF = ΔOCF − ΔCapEx; the working-capital part is the change in the cash-bridge items (receivables, inventory, payables, accruals), with the sign of the cash flow statement
Source: FY26 (cash flow statement, fiscal year) · FY25 (cash flow statement, fiscal year before)
A07 Stock compensation added back = no economic cost Not triggered confidence high
Stock compensation is 0.2% of revenue: small enough that adding it back changes little.
The figures and how they are read
| Fiscal year | FY26 |
| Stock compensation | $177M |
| Revenue | $94.7B |
| SBC / revenue | +0.2% |
| Buybacks | $796M |
| Buybacks / SBC | 4.5 |
| Diluted shares, year before | 243.0M shares |
| Diluted shares | 239.0M shares |
| Diluted shares: change | -1.7% |
SBC / revenue from the cash flow statement's add-back; the diluted weighted share count year over year; buybacks from the financing section
Source: FY26 (stock compensation, buybacks and the diluted share count, fiscal year)
B02 Receivables growing = future cash is certain Insufficient data
no quarter a year earlier to compare the last two quarters with
B08 Adjusted profit = economic profit Insufficient data
no reconciliation table read from the releases yet and fewer than three quarters with both an adjusted and a GAAP EPS
C02 Low net debt = no refinancing risk Not triggered confidence medium
$1.5B comes due within a year, 11.9× covered by cash and investments of $13.1B plus $4.9B of free cash flow.
The figures and how they are read
| Cash and investments | $13.1B |
| Debt | $24.2B |
| Net debt | $11.1B |
| Due within a year | $1.5B |
| Read from | the debt maturity table |
| Free cash flow, twelve months | $4.9B |
| Cash plus free cash flow | $18.0B |
| Coverage of what is due | 11.9 |
| Due in the second year | $552M |
| Balance sheet date | 2026-05-31 |
due within a year from the maturity table (else the current portion of debt), against cash and investments plus free cash flow over the last twelve months (zero if negative); no credit lines assumed
Source: FY26 (debt maturities, cash and investments)
D03 EPS growth = profit growth Not triggered confidence high
EPS fell 69% and net income fell 68% in Q1 FY27; the share count rose 0.8%: EPS growth follows profit growth.
The figures and how they are read
| Quarter | Q1 FY27 |
| Quarter before | Q1 FY26 |
| EPS, year before | $3.88 |
| EPS | $1.21 |
| Net income, year before | $920M |
| Net income | $290M |
| Diluted shares, year before | 237.0M shares |
| Diluted shares | 239.0M shares |
| EPS growth | -68.8% |
| Net income growth | -68.5% |
| Diluted shares: change | +0.8% |
| eps from profit | -$2.66 |
| eps from share count | -$0.01 |
EPS and net income against the same quarter a year earlier; the EPS bridge attributes the change to profit first, then to the share count (the order is fixed and disclosed)
Source: Q1 FY27 (net income, diluted shares, EPS) · Q1 FY26 (the same quarter a year earlier)
E02 Low P/E at a cyclical peak = undervalued Not applicable
a loss on a trailing or mid-cycle basis: the P/E has no meaning
E07 A precise DCF value = the true value To review confidence high
The DCF's point value is 252.01 a share (price 316.80); 72% of it is the terminal value, a number about years no one has seen. Moving operating margin by ±3 pts alone takes it from 96.29 to 407.74; across every method the research ran the range is -564 to 1,379. The value is a range; the decimals are not information.
The figures and how they are read
| dcf value | 252.01 |
| price | 316.80 |
| terminal value share | +71.5% |
| swing by input | Operating margin / ±3 pts / 96.29 / 407.74; Revenue growth (each year) / ±5 pts / 203.02 / 310.3; WACC / ±1 pt / 210.25 / 310.87; Tax rate / ±5 pts / 232.45 / 271.57 |
| range all methods | -563.75; 1379.21 |
the DCF's point value against the share of it that is the terminal value and the value at each input moved by one step (growth ±5 pts, WACC ±1 pt, margin ±3 pts …); the range across every method the research ran
Source: 2026-11-08 (valuation research)
What would explain it innocently
- A stable, mature business with a narrow range of outcomes, where the point value is a fair summary
- The inputs that matter most are themselves well known (a regulated return, a long contract)
What to look for in the filing
- Which input you believe differs from the research's and why
- What the price implies for growth (the reverse DCF on the fair-value page)
What would show the trap does not apply
- The DCF's value is robust to the terminal growth and discount rate (the range's low end is still above the price)
- The company's cash flows over the next three years track the DCF's early years
Look again: next filing.
J06 A bank's low P/E and high profit = safe Not applicable
not a bank
J08 A REIT's low net income = the dividend is unsafe Not applicable
not a REIT
What the statuses mean
Triggered: the filings show the pattern; read the normal explanations and the missing evidence before concluding anything. To review: one quarter or a weak signal; a reader's judgement, not a pattern. Not triggered: the pattern is absent on these figures. Insufficient data: the filings read so far do not hold what the rule needs; this is not a clean bill. Not applicable: the rule is not meant for this kind of company (a bank's working capital, a loss-making quarter's EPS growth). Out of date: the latest filing is more than fifteen months old.
Severity is what the pattern could mean for cash, value or solvency; confidence is how reliable the inputs and the reading are. The two are kept apart.
Record a view
A reader's judgement, grounds, what would change it and the next review; kept in the browser (needs JavaScript).
Every rule and the companies it triggers on → FedEx: cash flow → Earnings quality score →
Each rule reads the company's own filings by a fixed formula and says what would explain the same figures innocently. A triggered rule is a question to verify, not a finding of manipulation, and not a view on the stock. Missing data is shown as missing, never as clear. Not investment advice.