Company DCF analysis file
FedEx DCF Analysis
A FedEx DCF should connect shipment economics with network costs and then rebuild the perimeter after Freight’s separation. The May-ending FY2026 year still contains Freight. The following transition period is not another twelve-month year, so historical group cash cannot simply become a continuing-business run rate.
Revenue, expenses and profit on one annual basis
Historical FedEx consolidated comparison, $ millions: FY2025 ended 2025-05-31 and FY2026 ended 2026-05-31. The latest reported observation uses the same completed annual basis shown in these columns.
| Measure | FY2025 | FY2026 |
|---|---|---|
| Revenue | 87,926 | 94,720 |
| Salaries and employee benefits | 31,232 | 33,844 |
| Purchased transportation | 21,768 | 23,620 |
| Rentals and landing fees | 4,647 | 4,883 |
| Depreciation and amortization | 4,264 | 4,369 |
| Fuel | 3,775 | 4,052 |
| Maintenance and repairs | 3,245 | 3,330 |
| Separation and other costs | 38 | 771 |
| Total operating expenses including other rows | 82,709 | 89,257 |
| Operating income | 5,217 | 5,463 |
| Net income | 4,092 | 4,433 |
Source: Annual financial statements. Annual values are reported unless a row is marked derived.
The selected expense rows leave out other operating items; use the reported total to reconcile operating income. Revenue-per-shipment changes can include fuel and service mix, while aircraft, labor and facility commitments do not shrink immediately with volume. Separation charges also need a payment schedule, not only an adjusted earnings presentation.
Reconcile historical revenue before removing Freight
| Reported annual revenue, $ millions | FY2025 | FY2026 |
|---|---|---|
| Federal Express | 75,304 | 82,273 |
| FedEx Freight | 8,892 | 8,795 |
| Other revenue | 3,730 | 3,652 |
Source: Annual business disclosures and financial notes. Annual values are reported unless a row is marked derived.
These rows reconcile the May-ending historical group. Removing Freight requires retained costs, corporate allocations and financing to be rebuilt; subtracting its revenue alone does not produce the continuing cash forecast. The completed Supply Chain disposal is a further dated perimeter change.
Reconcile reported cash before forecasting investor cash
| Measure | FY2025 | FY2026 |
|---|---|---|
| Operating cash | 7,036 | 8,925 |
| Property investment: positive deduction | 4,055 | 3,809 |
| Cash after property investment: derived | 2,981 | 5,116 |
Source: Annual cash-flow statement and related notes. Annual values are reported unless a row is marked derived.
The 2026 subtraction is 8,925 minus 3,809 = $5,116 million. The annual cash improvement is not the $4.1 billion separation dividend, and tariff-refund receipts have corresponding customer-remittance considerations. Keep transaction cash, refunds and recurring parcel collections distinct instead of treating them all as repeatable delivery cash.
Latest released full-year basis
| Observation | Period-specific evidence |
|---|---|
| Reported period basis | FY2026 full-year results, released 2026-06-23, is the latest completed reporting release used here. This annual period still includes Freight before its June 1 separation. The June-to-December transition period is not a twelve-month year, and its next results were not released by the cutoff. Separation receipts and retained network cash must be modeled separately. |
| Interpretation boundary | The latest reported period is the same completed annual basis shown above; no newer completed quarter is supplied. |
Source: official reporting for the stated period. This is the latest completed annual release at October 25, 2026, already represented in the annual columns; no separate newer quarter is invented. Later reporting must be checked before refreshing the valuation date.
Turn the statements into a DCF operating case
Forecast shipments by service and operating day, net yield and the resource requirements of the service promise. Reconcile operating taxes, depreciation, leases, pension funding, working capital and network investment. Model optimization payments and their savings on separate dates. Bridge the June1 Freight separation and later disposal, then align the changed fiscal calendar before discounting a consistent continuing investor-cash series.
| Driver | Evidence to carry into the forecast | Downside condition to test |
|---|---|---|
| Network utilization | Shipment/service mix and scheduled capacity | Volume falls faster than network commitments can change |
| Fuel and yield | Base price, surcharge and transport-cost timing | Reported yield is mistaken for pure pricing power |
| Restructuring/perimeter | Transition payments, retained costs and comparable months | Adjusted savings or separation proceeds become recurring cash |
Compare delayed network consolidation while transition payments continue against a lower-demand case with modernization still due. Reconcile months and operating days before growth rates. Terminal cash must fund a service-consistent replacement and capacity plan, not merely extend the historical post-capex remainder.
Use the FedEx financial analysis for the broader operating context, the company forecast to state the operating assumptions, and the DCF calculator only after defining the investor cash stream. Keep the statement definitions, reporting dates and your own assumptions visible when comparing valuation cases.
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