FedEx (FDX) Stock Looks Undervalued Even After A 65% Run

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FedEx (FDX) Stock Looks Undervalued Even After A 65% Run Bailey Pemberton Fri, July 10, 2026 at 3:11 AM EDT 4 min read FDX AMZN Make better investment decisions with Simply Wall St's easy, visual tools that give you a competitive edge. FedEx stock has delivered a 64.8% return over the past year, while both an intrinsic value estimate using a Discounted Cash Flow (DCF) approach and earnings multiples currently suggest the shares trade at a discount to what the underlying cash flows imply. Over the last 1 year, FedEx has returned 64.8%. This puts fresh attention on whether the current price still leaves room for further value to be realised. Recent positive sentiment around analyst upgrades and the approval of a new pilot contract can support confidence in earnings durability, while rising competition from Amazon and other logistics players may weigh on how much investors are willing to pay for that cash flow stream. FedEx screens as undervalued on both the Discounted Cash Flow (DCF) intrinsic value estimate and earnings multiples. However, with a 4 out of 6 valuation score , the broader checks point to a mixed picture rather than an obvious bargain. The issue now is whether FedEx's recent share price strength still offers an attractive entry point relative to its intrinsic value, or if most of that valuation gap has already closed. FedEx delivered 64.8% returns over the last year. See how this stacks up to the rest of the Logistics industry. The Discounted Cash Flow (DCF) model here uses projected cash flows to estimate what FedEx shares might be worth today. FedEx generated last twelve month free cash flow of about $4.4b, and the cash flow projections in this 2 Stage Free Cash Flow to Equity model assume the business keeps growing rather than shrinking. On these inputs, the DCF points to an estimated intrinsic value of about $431 per share, compared with the current market price, which implies the stock trades at a 27.9% discount. Because Amazon Shipping is pushing aggressively into parcel delivery with sharp pricing, that competitive threat helps explain why FedEx can still trade below this intrinsic value estimate even after a strong share price move. On balance, the DCF workup suggests FedEx stock currently appears undervalued relative to its projected cash flows. Our Discounted Cash Flow (DCF) analysis suggests FedEx is undervalued by 27.9%. Track this in your watchlist or portfolio , or discover 44 more high quality undervalued stocks . Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for FedEx. For FedEx, the P/E ratio is a useful yardstick because earnings remain a key focus for both management and investors. FedEx currently trades on a P/E of about 16.7x, compared with an industry average of roughly 15.4x and a broader peer average near 23.9x. A P/E ratio of about 23.0x, based on the company's growth profile, margins, size and risks, is noticeably above where FedEx trades today. This comparison indicates that the stock appears undervalued on this metric even though it is slightly ahead of the logistics industry average. In other words, the market is applying a discount relative to what this framework suggests investors might typically pay for FedEx's earnings power. On balance, FedEx stock appears undervalued on the P/E multiple compared with the level indicated by its earnings profile and sector peers. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives for FedEx aim to connect the earlier valuation discussion with the assumptions that might be sitting underneath FedEx's share price. Instead of stopping at a single output from a ratio or model, Narratives unpack the growth, margins and earnings path that would need to play out for the stock to be worth meaningfully more or less than it is today. This helps you see what needs to occur and monitor whether that story is playing out over time on the Community page. FedEx investors on the Community page are split between a cost efficiency story and a tougher long term parcel demand and competition story. "FedEx's DRIVE initiative is achieving significant cost savings, with a target of $2.2 billion for FY '25 and a total of $4 billion compared to the FY '23 baseline..." Read the full Bull Case to see why FedEx could be undervalued "The rapid acceleration of digitalization and automation across key industries is likely to reduce the overall need for physical shipments, as virtual goods and services increasingly replace physical ones..." Read the full Bear Case to see why FedEx could be overvalued Do you think there's more to the story for FedEx? Head over to our Community to see what others are saying! This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include FDX . Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

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