FedEx: Attractive Valuation Despite Execution Issues And Risks

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Recent developments around FedEx do not hamper investor confidence. The company’s operating results fall for the third consecutive year. Their operating margin remains lower than that of UPS and their stock prices are undervalued by over 47% compared to their competitors. FedEx has been struggling to integrate and improve TNT results after being purchased three years ago. The company faces external risks, which include slowing economic conditions due to the trade war. In my opinion, the figures indicate that markets outsource very little to the company’s Express segment, and yet it delivers about 50% of FedEx’s revenue. Patience is needed to fill the gap in the valuations of both companies, which also creates a prerequisite for long-term positions.

 Trader Aleksandar Kumanov

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