The strongest reason to buy this long-term favorite is the structural transformation of its business model from an asset-heavy transportation network into an optimized, lean logistics platform. Historically, the company was plagued by the immense capital overhead of running separate delivery vehicles and line-haul systems for its Express and Ground divisions. Therefore the spin-off of the Freight business represents an excellent, value-unlocking catalyst. By streamlining the corporate parent structure to focus intensely on core package delivery operations, the firm can eliminate historic conglomerate discounts applied by investors.
The stock trades at 17.6 times the company’s forward earnings forecast. The valuation safely incorporates macroeconomic headwinds while leaving substantial room for upward multiple expansion as the newly streamlined, post-spin-off asset-light network maximizes its capital efficiency.
FEDEX CORP. (New York symbol FDX; www.fedex.com) delivers packages in the U.S. and 220 other countries.
On June 1, 2026, the company completed the spinoff of FedEx Freight. Shareholders received one share of FedEx Freight for every two FedEx shares they held. Investors will not be liable for capital gains taxes until they sell their new shares.
The parent company retained a 19.9% stake in FedEx Freight. It plans to dispose of those shares over the next two years. That could take the form of swapping shares with its lenders to retire outstanding loans, or as a special distribution to its own shareholders.
Meanwhile, in FedEx’s fiscal 2026 fourth quarter, ended May 31, 2026, revenue (including FedEx Freight’s contributions) rose 12.5%, to $25.01 billion from $22.22 billion a year earlier. That topped the consensus forecast of $24.04 billion.
The higher revenue is largely due to better demand for its priority delivery service in the U.S. and international markets.
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FedEx also continues to benefit from a major restructuring plan, which included retiring older cargo airplanes, consolidating facilities, reducing the number of routes and cutting jobs. These moves trimmed $4.0 billion from its annual costs.
If you exclude expenses related to the plan and other unusual items, FedEx’s earnings improved 4.9%, to $1.53 billion from $1.46 billion. Earnings per share rose 4.0%, to $6.31 from $6.07, on more shares outstanding. That also beat the consensus estimate of $5.95 a share.
FedEx’s split should be a plus for both firms
All in all, we expect the split will work out well for both firms, as investors tend to prefer “pure-play” companies that are easier to evaluate and compare to competitors.
As part of the spinoff, FedEx Freight paid its former parent company $4.1 billion. FedEx plans to use that cash to retire $4.15 billion worth of its outstanding notes. As of May 31, 2026, its long-term debt was $23.29 billion, or 32% of its $73.0 billion market cap.
Investors should note that FedEx is moving its fiscal year end from May 31 to December 31. For calendar year 2026, the company expects its revenue will rise about 11%. It also expects to earn between $16.90 and $18.10 a share. The stock trades at a reasonable 17.6 times the midpoint of that new range.
As a result of the spinoff, FedEx will cut your quarterly dividend by 15.9%. Starting with the July 2026 payment, investors now receive $1.22 instead of $1.45. The new annual rate of $4.88 yields 1.6%.
Recommendation in Wall Street Stock Forecaster: FedEx Corp. is a buy.
