UBS values FedEx’s parcel and freight units at $338 and $213 per share, respectively, using a sum-of-the-parts framework.
UBS maintained a Buy rating on FedEx Corp (FDX) with a $445 price target as the company prepares to spin off its freight business. The new standalone unit, FDXF, will begin when-issued trading on May 27 and regular trading on June 1.
The bank’s sum-of-the-parts valuation assigns $338 per share to the remaining parcel business (FEC) and $213 to FDXF. UBS applied a 7.4x EV/EBITDA multiple to FEC’s CY2027 estimates, a 10% premium to UPS and DHL, while FDXF was valued at 19.6x, in line with less-than-truckload peers.
Projected CY2027 earnings per share are $22.60 for FEC and $5.45 for FDXF, implying P/E multiples of 15x and 39x. Margin improvements are expected to drive performance, with FEC’s operating ratio tightening to 92.1% and FDXF’s to 87.2% by CY2027.