DCF Studio

    FDXF · NYQ · Industrials

    FedEx Freight Holding Company, Inc.

    Also onConsensus Drift

    Implied value per share

    USD 120.15

    Market price

    USD 131.85

    Implied upside

    -8.9%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2026-05-31

    Value Per Share

    Perpetuity growth
    USD 120.15-8.9%
    Exit multiple
    USD 176.42+33.8%
    Market price
    USD 131.85

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn2bnFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36
    Nominal FCFFDiscounted to todayUSD
    LineFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36CAGR
    RevenueUSD 9.3bnUSD 9.8bnUSD 10.3bnUSD 10.7bnUSD 11.2bnUSD 11.7bnUSD 12.1bnUSD 12.5bnUSD 12.8bnUSD 13.1bn+3.9%
    EBITUSD 1.5bnUSD 1.6bnUSD 1.7bnUSD 1.7bnUSD 1.8bnUSD 1.9bnUSD 2.0bnUSD 2.0bnUSD 2.1bnUSD 2.1bn+3.9%
    NOPATUSD 1.2bnUSD 1.3bnUSD 1.3bnUSD 1.4bnUSD 1.4bnUSD 1.5bnUSD 1.5bnUSD 1.6bnUSD 1.6bnUSD 1.7bn+3.9%
    Add depreciation & amortisationUSD 415.1mUSD 437.6mUSD 459.7mUSD 481.2mUSD 502.0mUSD 521.8mUSD 540.5mUSD 558.0mUSD 574.0mUSD 588.3m+3.9%
    Less capital expenditureUSD -455.5mUSD -483.1mUSD -510.7mUSD -537.9mUSD -564.6mUSD -590.5mUSD -615.4mUSD -639.1mUSD -661.4mUSD -681.9m+4.6%
    Capex, % of revenue4.9%4.9%5.0%5.0%5.0%5.1%5.1%5.1%5.2%5.2%-
    Less increase in working capitalUSD -1.2mUSD -1.2mUSD -1.2mUSD -1.2mUSD -1.1mUSD -1.1mUSD -1.0mUSD -950.8kUSD -871.0kUSD -782.2k-4.3%
    Free cashflow to firmUSD 1.1bnUSD 1.2bnUSD 1.3bnUSD 1.3bnUSD 1.4bnUSD 1.4bnUSD 1.5bnUSD 1.5bnUSD 1.6bnUSD 1.6bn+3.7%
    Discount factor0.96260.89200.82650.76590.70970.65760.60940.56470.52320.4849-
    Present valueUSD 1.1bnUSD 1.1bnUSD 1.0bnUSD 1.0bnUSD 974.8mUSD 936.7mUSD 896.9mUSD 855.8mUSD 813.7mUSD 771.0m-
    Present Value Of The ForecastUSD 9.5bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.000As reported
    Cost of equity9.12%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 18.1x interest cover. Book interest / average debt was lower, at 1.5%.
    Market capitalisationUSD 19.7bn75.6% of capital
    Total debtUSD 6.4bn24.4% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC7.92%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 120.15

    61% of EV

    Forecast FCFF, final year
    USD 1.6bn
    Capex at depreciation, working capital in reinvestment
    USD 1.7bn
    Less reinvestment at g/ROIC (5.6% of NOPAT)
    USD -93.6m
    Capitalised
    USD 1.6bn
    ROIC (reported)
    45.0%
    Terminal value, undiscounted
    USD 30.1bn
    Terminal value, discounted
    USD 14.6bn
    Enterprise value
    USD 24.1bn
    Less net debt
    USD 6.1bn
    Equity value
    USD 18.0bn

    Exit at 17.4x EBITDA

    Value per shareUSD 176.42

    71% of EV

    Terminal value, undiscounted
    USD 47.4bn
    Terminal value, discounted
    USD 23.0bn
    Enterprise value
    USD 32.5bn
    Less net debt
    USD 6.1bn
    Equity value
    USD 26.4bn

    Spread between methods: 38%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.92%174.14191.16213.26243.03285.25
    6.92%134.20144.03156.16171.46191.32
    7.92%106.75112.86120.15128.98139.88
    8.92%86.7390.7295.37100.86107.41
    9.92%71.5074.1977.2880.8685.03

    Outlined: this model. Green text: above today's price of 131.85. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year-4.5%4.1%4.9%
    EBIT margin18.8%16.2%17.4%
    Discount rate-7.9%7.5%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.