Can FedEx Corporation Stock Hit $498 by 2029? The Numbers Say Yes!

Is FedEx Corporation the hidden gem of the logistics sector? With its stock price dipping to $247.27 as of March 20, 2025, and a projected upside of over 27%, Intelligent investors are eyeing a potential bargain. Dive into our forecast to uncover whether now’s the time to buy—or wait—for this industry titan.

FedEx Corporation provides a wide range of transportation, e-commerce, and business services. These services are offered through independently competitive but collectively managed companies under the FedEx brand. The main activities of the company are:

1. Federal Express Corporation, the largest express transportation company in the world;
2. FedEx Ground Package System, Inc., the leader in small package delivery in North America;
3. FedEx Freight, Inc. is a leader in smaller than truckload (LTL) shipping services in the USA.

Financial Performance and Ratios

FedEx Corporation has demonstrated resilience in its financial performance amidst a dynamic economic environment. For fiscal year 2024 (ended May 31, 2024), FedEx reported consolidated revenue of $87.7 billion, a slight decline from $90.2 billion in fiscal 2023, reflecting challenges such as muted retailer restocking and softer industrial demand.

Despite this, the company achieved a diluted earnings per share (EPS) of $17.21, with an adjusted EPS of $17.80, bolstered by its DRIVE cost-saving program, which delivered $2.2 billion in savings for the year.

For the first quarter of fiscal 2025 (ended August 31, 2024), FedEx reported revenue of approximately $21.6 billion, with diluted EPS of $3.21 and adjusted EPS of $3.60, reflecting continued efficiency gains despite volume pressures.

Key financial ratios provide insight into FedEx’s operational health. As of the latest data, FedEx’s trailing price-to-earnings (P/E) ratio stands at 15.71, suggesting the stock is reasonably valued relative to earnings, while its forward P/E ratio of 11.67 indicates potential undervaluation based on expected future earnings.

The company’s current ratio is 1.23, indicating sufficient liquidity to cover short-term liabilities, though its debt-to-equity ratio of 1.41 reflects a moderate reliance on leverage. Return on equity (ROE) is 14.61%, demonstrating solid profitability relative to shareholders’ equity, while return on invested capital (ROIC) is 6.37%, suggesting efficient capital utilization. FedEx’s enterprise value-to-EBITDA (EV/EBITDA) ratio is 8.44, aligning with industry norms and indicating a balanced valuation.

FedEx Corporation Stock Price Performance

As of March 20, 2025, FedEx’s stock (NYSE: FDX) price is $247.27, with a market capitalization of approximately $59.52 billion. Over the past month, the stock has experienced a downward trend, declining from $267.10 on February 18, 2025, to the current level—a drop of about 7.4%.

This follows a volatile year, with the stock reaching a year-high of $313.84 and a year-low of $239.50. Over the past 12 months, the stock price has decreased by approximately 14.6% from $289.74 in March 2024, underperforming the broader market (e.g., the S&P 500).

This decline reflects macroeconomic headwinds, including inflation and reduced shipping volumes, though FedEx’s strategic cost reductions have mitigated some pressure on profitability. The stock’s beta of 1.24 indicates higher volatility than the market average, aligning with its sensitivity to economic cycles.

The stock’s current price of $247.27, below the analyst average target of $315.43 (implying a 27.6% upside), suggests it may be undervalued, particularly with a forward P/E of 11.67 and a 2.24% dividend yield offering stability.

Competitive Landscape

FedEx operates in a highly competitive logistics and transportation industry, facing rivals across its express, ground, and freight segments. Its primary competitor in the U.S. parcel delivery market is United Parcel Service (UPS), which benefits from a denser domestic network and higher margins due to its longer-established ground operations.

FedEx, however, holds an edge in speed and has strengthened its ground segment over the past decade, narrowing the gap with UPS. Internationally, DHL Express dominates Europe and poses a significant challenge in the express delivery market, leveraging its extensive global reach. Other competitors include regional players like J.B. Hunt Transport Services and C.H. Robinson Worldwide, as well as e-commerce giants like Amazon, which has built its own logistics network, reducing reliance on traditional carriers like FedEx.

FedEx’s competitive strengths include its vast global infrastructure, leadership in the U.S. less-than-truckload (LTL) market via FedEx Freight, and adaptability to e-commerce growth. The company’s „One FedEx” initiative, launched in fiscal 2025, aims to streamline operations across its segments, enhancing efficiency and customer service. However, it faces threats from rising operational costs, geopolitical disruptions, and Amazon’s encroachment into last-mile delivery.

Investment Insight

Since our last analysis, the company’s performance metrics have improved, and its Investment Scoreboard rating has increased. FedEx’s financial performance demonstrates a company adeptly managing short-term challenges—such as reduced shipping volumes—while laying the groundwork for sustained long-term growth through rigorous cost management and strategic realignment.

Based on its PEG ratio of 0.37 and equity risk premium indicators, FedEx’s stock appears significantly undervalued in the market. This presents an attractive opportunity to acquire these shares at a substantial discount.

FedEx Corporation Stock Forecast**

2025–2029 Price Targets: 

Year	MIN Target	MAX Target
2025	272.42	356.97
2026	296.07	387.96
2027	321.77	421.65
2028	349.70	458.25
2029	380.06	498.04

When to buy and Investment Tips

Following a significant price correction in the market (as of the time of writing), there is a favorable window to acquire shares that have already declined in value. Investors can confidently add to existing positions. Alternatively, one might consider waiting in anticipation of a further drop in stock price, particularly if market volatility persists.

Timing the Market: The recent 7.4% drop offers a buying opportunity, but persistent volatility (beta 1.24) suggests cautious investors might wait for a further correction. 

Dividend Policy and Buyback Policy

FedEx maintains a shareholder-friendly capital return strategy. The company pays an annual dividend of $5.52 per share, yielding 2.24% at the current stock price of $247.27. In June 2024, FedEx raised its quarterly dividend by 10%, from $1.26 to $1.38 per share, signaling confidence in its cash flow generation. In fiscal 2024, FedEx returned $3.8 billion to shareholders through dividends and stock repurchases, including $2.5 billion in buybacks.

For fiscal 2025, the company completed a $1 billion share repurchase in the first quarter and plans an additional $1.5 billion, totaling $2.5 billion for the year. With $4.1 billion remaining under its 2024 repurchase authorization and $5.9 billion in cash on hand as of August 31, 2024, FedEx is well-positioned to continue enhancing shareholder value. This policy underscores management’s focus on balancing growth investments with capital returns.

Conclusion

FedEx stands at a crossroads: navigating short-term economic headwinds while poised for long-term growth. With a PEG ratio of 0.37 signaling undervaluation, a robust 2.24% dividend yield, and ambitious cost-saving initiatives, the stock offers a compelling case for investors. Whether you buy now or hold for a deeper dip, FedEx’s trajectory through 2029 suggests significant upside potential.

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*Investment analysis involves scrutinizing over 50 different criteria to assess a company's ability to generate shareholder value. This comprehensive approach includes tracking revenue, profit, equity dynamics, dividend payments, cash flow, debt and financial management, stock price trends, bankruptcy risk, F-Score, and more. These metrics are consolidated into a straightforward Investment Scoreboard, which effectively helps predict future stock price movements.
**Use the price forecast to manage the risk of your investments.