Company Infomation

FedEx Corporation provides transportation, e-commerce, and business services worldwide. Its FedEx Express segment offers shipping services for delivery of packages and freight. Its FedEx Ground segment offers business and residential money-back guaranteed ground package delivery services. Its FedEx Freight segment offers less-than-truckload and other freight delivery services. Its FedEx Services segment provides sales, marketing, information technology, communications, customer service, technical support, billing and collection, and other back-office support services. It also offers FedEx Mobile and FedEx Office. Its Corporate, Other & Eliminations segment offers international trade services in customs brokerage, and ocean and air freight forwarding services; cross-border enablement and technology solutions, and e-commerce transportation solutions; integrated supply chain management solutions; time-critical shipment services; and critical inventory and service parts logistics, and technology repair. Finally, FedEx offers international trade advisory services, including assistance with customs-trade partnership against terrorism program; and publishes customs duty and tax information.

Executive Summary

Investment Thesis: FedEx offers an opportunity of riding the wave of renewed and pandemic catered growth strategies that could allow the company to grow its operations despite increased operational expenses over the last year due to increased precautions. The company through its various operational segments has worked to build trust and strong business relationships with various small and medium sized businesses which could allow it to take advantage of the continued shift to businesses being conducted online. Its recent acquisition of TNT Express is also predicted to improve its international standing in residential delivery services and smaller package delivery across Europe which could aid to boost the company’s growth despite the pandemic bogging down international trade and affecting the industry as a whole negatively.

Investment Merits: Growth in  Ecommerce, Increased domestic operations and European local and small freight transportation expansion through acquisitions, competitive edge in value shipping, brand reputation

Investment Risks: Stiff domestic competition and increased consolidation in the industry, possible trade issues in Europe that would harm expansion, low growth in international trade in 2021,

Investment Catalysts: Investors are underestimating the significance of a large cap cheap shipping service during an economy where transactions are going increasingly virtual and ecommerce is on the rise. There is also a strong possibility of the distribution of a vaccine positively affecting FedEx’s Global Courier and Delivery Service revenue segment.

Recommendation:   (15-35 shares)