He’s Calling For A Worldwide Recession

It’s been a tough year for CEOs [View in browser]( BROUGHT TO YOU BY: Proprietary Data Insights Financial Pros Freight and Logistics Searches In The Last Month Rank Name Searches #1 FedEx Corp 2,814 #2 United Parcel Service 704 #3 C.H. Robinson Worldwide 204 #4 XPO Logistics 98 #5 ZTO Express 4 #ad [Do not buy any cryptocurrency before seeing this]( Brought to you by [Banyan Hill]( [AI to Disrupt Energy Market (Huge Potential Gains!)]( This orb represents the largest untapped energy source in the world… And although 99% of the public doesn't know about this energy resource… It makes gas, coal, oil, wind, hydropower, solar, and fusion all look like small fries. In fact, just one year of this untapped resource in the USA alone provides 5X as much power as the largest oil field on Earth… And one tiny Silicon Valley company is about to unleash this resource on the world like never before… [Click here for all the details.]( Industrials He’s Calling For A Worldwide Recession It’s been a tough year for CEOs. Mark Zuckerberg has seen his net worth decline by $71 billion. Now, the new FedEx(FDX) CEO, Raj Subramaniam, is calling for a worldwide recession after his company announced an 11% reduction in global package and freight volume. It’s no surprise that financial pros have made FDX the most searched freight and logistics stock over the last month. On the day the company announced its expectation for a recession, stocks plummeted. With blood in the streets, is now an opportunity to get FDX shares for cheap, or is there more pain ahead? [Shocker: The TRUE Inflation Rate Is …]( The government says the inflation rate is 8.5%, which is already bad enough. But, if you calculate inflation the way the government did in 1980, it’s actually 17%. The impact on the average retiree is shocking: They lose an estimated $584,000 in purchasing power. Fortunately, there are some very simple and powerful ways to turn the tables on this crisis and transform it into a wealth-building opportunity unlike anything seen in over four decades. [Watch this to learn how.]([Ad] FedEx Corporation’s Business FedEx Corp. (FDX) is the second largest publicly traded company in the express shipping category. The firm has over 550,000 employees, serving more than 220 countries and territories. FDX breaks down its business into the following segments: FedEx Express, FedEx Ground. FedEX Freight, and FedEx Services. [Revenue ] Despite FDX being one of the top players in its category, it has fallen victim to the recent economic climate. The firm announced it would increase its freight rates by an average of 6.9%-7.9%. Furthermore, its Q1 adjusted earnings of $3.44 per diluted share are down from last year’s $4.37. To combat these issues, FDX announced it would implement a cost-cutting program, which includes parking some of its plans and shutting some of its corporate offices, after seeing an 11% Y/Y reduction in global package and freight volume. Financials [Financials ] From 2016 to 2022, FDX grew revenues by 86%. While it's off to a rocky start for the fiscal year 2023, 2022 was a record year for revenues for the firm. However, its CEO has warned that the economy will enter a worldwide recession. To make matters worse, the company withdrew its full-year profit forecast. Despite shares being down more than 42% YTD, the company still boasts an impressive $4.60 annual dividend, a yield of 3%. FDX has $6.8 billion in total cash and $37.6 billion in total debt. However, it has a current ratio of 1.42x, indicating it has plenty of liquid capital to address its short-term liabilities. Valuation [Valuation] Despite the company warning investors of its upcoming challenges, it’s currently trading at an attractive P/E GAAP valuation of 11x. And even it’s forward P/E ratio doesn’t look too bad at 9.99x. Over the last 3-years, its average P/E ratio has 40x. Furthermore, its P/E ratio is now lower than its largest competitor, United Postal Services (UPS), which trades at 13.2x. Other competitors in the space include ZTO Express (ZTO), C.H. Robinson Worldwide (CWRW), and XPO Logistics (XPO), all of which trade at higher P/E ratios except for XPO which trades at 6.3x. FDX now trades at a price-to-cash flow of 4.1x, significantly lower than its 5-year average of 9.3x. None of its competitors can match that. Its closest is XPO at 6.6x. Even more remarkable, FDX trades at a price-to-sales ratio of 0.41x, notably lower than its five-year average of 0.75x. The largest player in the space, UPS, has a current price-to-sales ratio of 1.4x. Profitability [Profitability ] FDX operates at a gross profit margin of 24.7%, which is better than all its competitors, including UPS, at 24.5%. Management at FDX announced the company would be increasing its freight rates to combat inflation. FDX has a return on equity of 14.5%, significantly less than UPS at 80.5% and CHRW at 55.3%. However, its EBITDA margin of 10.2% is better than CHRW at 5.5% and competitive with UPS at 16.6%. Growth The pandemic helped shipping companies as fewer people visited stores and relied more on deliveries to get their goods. [Financials ] However, the state of the global economy plays a significant factor in future growth. While FDX has experienced 9.3% (YoY) revenue growth, the firm’s latest quarter showed a decline, and the company’s CEO expects the global economy to worsen. Its EBITDA growth of -17% is not a good sign, but it is worth noting this isn’t its first rodeo. The firm has been around for nearly 50 years and has dealt with economic slowdowns and recessions in the past. Our Opinion 6/10 FDX is one of the great American companies. Unlike some sectors like retail, e-commerce, and software, the barrier to entry is high in freight and logistics. FDX has been in business for nearly 50 years, and despite an expected economic slowdown, the company and its shares will bounce back. If you’re patient and believe we won’t be in a recession for too long, we think building a partial position at these levels can pay off in the future. [We want to hear from you! Let us know your thoughts by clicking here]( # [submit to reddit]( [submit to reddit]( [submit to reddit]( [submit to reddit]( To ensure delivery of all emails, [whitelist us](. Update your email preferences or unsubscribe [here](. View our privacy policy [here](#). Copyright ©2022 InvestingChannel. 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