Trim 30–35% at $318–$319 or $307, hedged core with $293 stop and $280 floor
Underweight with calibrated 30–35% trim is the analytically correct response because the 9/1 directional mandate (bearish tactical stack + high beta 1.36 + binary catalyst within 30 days) is dispositive for Underweight, while the 9/11 magnitude discipline empirically produced +0.6% alpha despite wrong directional call; structural positives (200 SMA intact, $13.3B cash, $2.72B NGDS-2 defense contract, Freight spin-off floor) justify core retention; the decision wins if macro/rate regime compresses cyclical multiples OR Q1 FY27 earnings disappoint, and limits damage if wrong via hedged 65–70% core participation in any structural re-rating from Network 2.0 completion or Freight spin-off execution.
| Position | Action |
|---|---|
| Trim magnitude | 30–35% of current position, executed in tranches over 1–3 sessions |
| Residual position target | 65–70% of original position size after trim execution |
| Hedge allocation | Approximately one-third of freed capital from trim into put protection (Dec or Mar expiry, strikes around $295–$300) |
| Pre-committed FOMC trim (Sept 16) | If price weakens below $305 into print, execute additional 5–10% trim from residual core to neutralize event risk |
FedEx represents a cash-generating industrial compounder hiding in plain sight, with a structural earnings and FCF inflection, multi-year margin expansion program in execution, a freshly re-ratable Freight spin-off catalyst, and a nascent digital services layer—trading at a forward P/E that fails to reflect any of these developments.
| Indicator | Value | Signal |
|---|---|---|
| 200 SMA | 292.93 | bullish |
| 50 SMA | 318.96 | neutral |
| 10 EMA | 316.96 | bearish |
| MACD | −2.64 | bearish |
| MACD Signal | −0.35 | bearish |
| MACD Histogram | −2.28 | bearish |
| RSI(14) | 41.44 | neutral |
| Bollinger Middle Band | 324.04 | neutral |
| Bollinger Upper Band | 340.91 | neutral |
| Bollinger Lower Band | 307.17 | neutral |
| ATR(14) | 7.29 |
This report is AI-generated for informational and educational purposes only and is not investment advice or a recommendation to buy or sell any security. Full disclaimer.
When: Price weakness to $307–$309 (lower Bollinger test)
Then: Execute trim tranche at lower Bollinger test if price fails to reclaim 50 SMA
EV: +8.7% (to $340) · concedes: DRIVE program restructuring charge ($1.14B FY26) is a real near-term cost, though framed as 'deferred earnings'; Fuel is a real cost line with partial (70-80%) surcharge recovery leaving residual headwind; Technical momentum (RSI 41, MACD bearish cross 6 days old) is bearish short-term; Stock has rallied from $180 to $340+ with limited pullback history in this move; Fed hike probability (88%) represents ongoing macro headwind for multiple expansion
FedEx's FCF inflection is driven by capex cuts, not operational improvement; the Freight spin-off contradicts the Network 2.0 integrated-network thesis; macro is repricing in real time with oil at $105 and 10Y at 5%; and technicals show unanimously bearish short/medium-term signals ahead of a binary Q1 FY27 earnings catalyst.
EV: -6% to -12% (Targets: $293 and $274 from $312 entry) · concedes: FCF yield of ~7.6% is high relative to industrial peers; FedEx's fuel surcharge mechanism does historically recover 70-80% of fuel cost moves on a lagged basis; Polymarket recession probability is only 10% (though argued it's an unreliable retail-sentiment aggregator, not a macro forecaster)
→ vs conservative: Patience is appropriate when trends are intact and catalysts align—but here the trend is rolling over on every timeframe below 200-day, catalysts are stacked against the position, and management has signaled with their own buyback reduction that they see less value in their stock at these levels
→ vs neutral: The 'fundamentals are strong' argument is precisely why management is selling into strength rather than buying more; strong fundamentals created the 70% rally from $180 lows that is now behind us
→ vs neutral: The 'hold through earnings' call ignores that the FCF story has an unknown split between real operational improvement and pulled-forward maintenance capex that cannot be sustained indefinitely
→ vs conservative: 'Buy the dip' mentality hasn't priced in that the discount rate has moved materially higher with 10-year at 5% and the Fed still tightening, compressing cyclical industrial multiples over a 2-3 quarter window
→ vs conservative: The spin-off 'value unlocking' thesis is a 2027 story that actually makes FDX parent less diversified and MORE exposed to parcel/Express headwinds in the near term
| neutral |
| VWMA(60) | 321.94 | neutral |
Support: 292.93 · 307.17 · 309.19 · 312.57 | Resistance: 316.96 · 318.96 · 324.04 · 340.91
FDX's long-term trend remains bullish (price above rising 200 SMA at 292.93), but the medium and short-term trends are neutral to bearish (price below 50 SMA and 10 EMA, both declining). Momentum is bearish with MACD negative and expanding (−2.64 line vs −0.35 signal), while RSI at 41.44 indicates weak but not oversold conditions. Bollinger Lower Band at 307.17 is the critical short-term support level to watch; a close below would signal the pullback may be turning into a reversal.
Market Cap
$73.98 B
Enterprise Value
~$86.4 B
Share Price (TTM)
~$308
52-Week High
$345.37
52-Week Low
$180.80
50-Day Moving Average
$318.97
200-Day Moving Average
$293.62
Beta
1.36
Shares Outstanding
~240 M
TTM EPS
$18.56
Forward EPS
$20.86
TTM P/E
16.84x
Forward P/E
14.98x
PEG Ratio
1.32
Price / Book
2.37x
Book Value per Share
$131.86
Dividend Yield
1.56%
FY26 Total Revenue
$94.72 B
FY26 Revenue YoY
+7.7%
FY26 Gross Profit
$20.62 B
FY26 Gross Margin
21.8%
FY26 EBITDA
$11.13 B
FY26 EBIT
$6.76 B
FY26 Net Income
$4.43 B
FY26 Diluted EPS
$18.55
FY26 EPS YoY
+10.3%
FY26 Operating Margin
5.8%
TTM Net Margin
4.7%
TTM Operating Margin
11.1%
TTM EBITDA Margin
12.5%
Return on Equity (TTM)
14.85%
Return on Assets (TTM)
5.0%
Forward EPS Growth Implied
~12.4%
Q4 FY26 Revenue
$25.01 B
Q4 FY26 Gross Margin
22.7%
Q4 FY26 Operating Income
$2.09 B
Q4 FY26 Net Income
$1.60 B
Q4 FY26 Diluted EPS
$6.60
Q4 FY26 Normalized EBITDA
$3.86 B
Q4 FY26 Reported EBITDA
$3.33 B
FY26 Total Unusual Items
$1.14 B
Total Assets
$98.94 B
Cash & Equivalents
$13.31 B
Receivables
$12.67 B
Net PPE
$58.87 B
Total Debt
$42.94 B
Long-Term Debt (excl. lease)
$23.29 B
Capital Lease Obligations
$17.23 B
Net Debt
$12.40 B
Total Equity
$31.65 B
Total Capitalization
$54.94 B
Working Capital
$8.99 B
Current Ratio
1.48
FY26 Operating Cash Flow
$8.93 B
FY26 Capital Expenditure
$3.81 B
FY26 Free Cash Flow
$5.12 B
FY26 FCF / Revenue
5.4%
TTM FCF
$5.66 B
FCF Yield
~7.6%
FY26 Dividends Paid
$1.37 B
FY26 Buybacks
$0.80 B
FY26 Net Debt Issuance
+$3.98 B
Debt / Equity
135.7%
EV / TTM EBITDA
~7.3x
Capex as % of Revenue (FY26)
4.0%
Payout Ratio
~31%
Strengths
Concerns
FedEx reported record FY26 results with revenue of $94.72B (+7.7% YoY) and EPS of $18.55 (+10.3%), driven by the DRIVE cost-transformation program which expanded gross margins by ~25 bps to 21.8%. The key inflection point is free cash flow nearly doubling to $5.12B (7.6% FCF yield) as disciplined capex spending ($3.81B, down from $4.06B) and operating leverage combine, while the balance sheet strengthened with net debt falling $2.7B to $12.40B and cash more than doubling to $13.31B; Q4 FY26 was particularly strong with gross margins expanding to 22.7% and operating income nearly doubling sequentially. Valuation appears reasonable at 16.84x TTM P/E and 14.98x forward P/E with an implied ~12.4% EPS growth rate, though risks include cyclical exposure, high leverage (D/E 135.7%), DRIVE execution risk, and the stock's ~70% rally from 52-week lows limiting margin of safety.
Macro: Macro backdrop turned sharply hawkish with the 10-year Treasury briefly crossing 5% for the first time since 2023, Polymarket pricing an 88% probability of a 25 bps Fed hike at the September 16 meeting (up from 52% a week prior), 2026 Fed path pricing 92% hike by year-end with 0% probability of cuts, WTI crude at $105 in September (71% probability, up from 20%), and recession probability rising to 10% (+3pp). Diesel near $6/gallon (~double year-ago) directly pressures FedEx Express and Freight fuel costs. The market has repriced from a soft landing + eventual cuts regime to sticky inflation + continued Fed tightening.