The Fedex Stock 's Price

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FedEx has produced superior financial returns to its shareholder in last couple of year. It has a worldwide business with a broad portfolio of transportation, e-commerce and business services. It consistently ranked among world’s most trusted and admired employers. The revenue has been consistently increasing and expected to reach at 45 billion in next year. EPS is also about 5.5 and the expected P/E ratio is 14.3 which show its growth potential. With the stock’s beta of 1.27 and latest dividend payout ratio of 9%, it can be expected that it will give a superior result in near future and thus it is one of the best alternatives for investment.
The FedEx stock’s price range in last year was 101.95 – 155.31. Currently its stock’s price is
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From 2005, FedEx has decided to eliminate the classified structure of Board and allowed for the annual election of all directors. Investors’ interest has been protected and tried to maintain the full integrity in business operation. It is tried to ensure the disclosure of all the material information and a complete transparency so all investors have access of clear factual information.
The next year’s growth rate is expected to be 21.10% which is higher than the Industry and market growth. This higher growth rate is based on it’s a strong financial base, huge market capitalization, higher growth potential, consistent earnings record, diversified portfolio and a reputation it earned in past several years.
The estimated beta of firm is about 1.27. This figure is retrieved from a reliable
To calculate the firm’s required rate of return, CAPM model is applied as follows:
One year US Treasury rate of return = 0.10%
One year Market return on S&P 500 = 24.40%
The beta of FedEx stock = 1.27
Hence, the firm’s required rate of return = 0.10 + 1.27*(24.40 – 0.10) = 30.96%
For year ended 31st Mar’14, Cash flow from operating activities is $4,264 million and Cash flow from investing activities is $3,551 million. Hence, Free cash flow (FCF) to the firm will be Cash flow from Operating activities less Cash flow from Investing activities, i.e. $4,264 -
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