Danya Rahman

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• Danya Rahman
• Hoa Lien
• Martha Mejia
• Sara Woodbury
• Ruchi Shah

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Background

• 1913C.J. Tower Sons, forerunner to FedEx Trade
  Networks subsidiary FedEx Trade Networks
  Transport Brokerage, begins operation as a
  customs broker in Niagara Falls, N.Y.
• 1971Federal Express Corporation is founded in
  Little Rock, Ark by Frederick Smith.
  
• 1977After two years of lobbying led by Federal
  Express, Congress passes Public Law 95-163,
  enabling FedEx and other cargo airlines to use
  larger aircraft with no geographic restrictions
  on routes.
• 1994Federal Express officially adopts "FedEx" as
  its brand for recognition as the worldwide
  standard for fast, reliable service.
  
• 2000Parent company FDX is renamed "FedEx
  Corporation." Services are divided into companies
  that operate independently yet compete
  collectively FedEx Express, FedEx Ground, FedEx
  Global Logistics, FedEx Custom Critical and FedEx
  Services

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Mission Statement

• FedEx strives to produce superior financial
  returns for shareowners by providing high
  value-added supply chain and transportation
  services.
• FedEx companies will strive to develop mutually
  rewarding relationships with its employees,
  partners and suppliers.
  
• Safety will be the first consideration in all
  operations. All corporate activities will be
  conducted to the highest ethical and professional
  standards.

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Management
FREDERICK W. SMITH
T. MICHAEL GLENN
ALAN B. GRAF, JR
President, Chief Executive Officer, FedEx Servi
ces Salary 2,059,787 Total Shares
199,872              

Executive Vice President, Chief Financial Office
r Salary 2,104,530 Total Shares
183,590            
Chairman, President, Chief Executive Officer
Salary 4,244,242 Total Shares 15,269
,791              

of Shares Held by All Insider and 5 Owners 8
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FedEx Aircrafts
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FedEx Freights
A group of new FL 70 City units
with air ride seats,cabs,
and suspensions
R4179 With FedEx Logo'ed trailers.
Photo of rebranded AF equipment,
now FedEx Freight
When FedEx bought Caliber Systems,
one of the companies acquired was Roberts
Express. FedEx changed the name to FedEx Custom
Critical. This photo was taken at FedEx Freight
( formerly American Freightways
and Viking Freight) customer center at Charlotte,
N.C.
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Competitors Chart

• FedExs has four major competitors in the air
  courier industry, two of which are not publicly
  traded in the NYSE- DHL and USPS.

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• Average Daily Volume - More than 3.2
  million packages daily
  
• Workforce - More than 138,000 employees
  worldwide
  
• Service Area - More than 220 countries and
  territories, including every address in the
  United States
  
• Recent Awards - Air Cargo World "World's Top 50
  Cargo Airlines" list, No. 1 (2004)

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• Workforce - More than 25,000 employees
• Average Daily Shipments - More than 64,000
  shipments daily
  
• Service Area - Full-state coverage throughout the
  United States (including Alaska and Hawaii)
  international service for Canada, Mexico, Puerto
  Rico, Central and South America, the Caribbean,
  Europe and Asia
• Recent Awards - American Trucking Association,
  National Truck Driving Championship FedEx
  Freight driver Wayne Crowder won the National
  Grand Champion and National Rookie of the Year
  (2004) first place in the 3-Axle class and
  5-axle class categories (2004).

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• Workforce - More than 53,000 employees and
  independent contractors
  
• Average Daily Volume - More than 2.6
  million packages daily
  
• Recent Awards - American Trucking Association
  President's Trophy for best overall safety
  program (1996, 2000, 2004)

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• Workforce -More than 20,000 employees worldwide
• Service Area-Service in 11 countries
• Recent Awards -Information Week "Information
  Week 500" list for top information technology
  innovators (2001-2004)
  

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• Average Daily Volume -Approximately 700 shipments
  
  
• Service Area - Service throughout the United
  States and Canada, and within Europe
  
• Workforce - More than 2,000 employees and
  contractors
  
• Recent Awards -Logistics Management Quest for
  Quality Award, Expedited Motor Carriers category
  (2004)

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Segment Revenue Chart
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FedEx Corporation Key Ratio Analysis
Strength in Growth Rate Percentage
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Price Ratios
FAIR in Price Ratio
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Profit Margin Ratios
Fair Profit Margin
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Financial Condition
Fair financial condition
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Investment Returns
Good Investment Returns
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Management Efficiency
FAIR management efficiency
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Holding Period Return
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FedEx Ratios Conclusion

• Based on FedEx ratios, overall, we conclude that
  this company has Strength!!

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Trading Analysis

• Current Price 85.61
• Trading Volume 2,375,800
• Market Capitalization 25.86 Billion

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Market Efficiency
Company Specific News This reaction takes no
form of market efficiency
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Market Efficiency
Non Company Specific News Fed raises interest
rates. FedEx reaction weak form.
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Capital Structure
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Risk Analysis
The company is currently underpriced because
ke(DCF Model) ke(CAPM Model) 0.44 0.0321.

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Cost of Capital
FedEx has negative figures for Ke in DCF and
CAPM. We used constant growth rate model to calcu
late the Ke in WACC.
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5-Year Price Chart
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Strengths and Weaknesses

• Strengths
• Based on required return comparison between the
  DCF model and CAPM model, it appears that the
  stock is underpriced at 98.19. This is a strong
  indication that they will meet their mean value
  estimation of 105.77.
• The capital market structure is stable. Also the
  WACC is low. The holding period return has
  increased steadily from 2003 to 2004.
  
• Weaknesses
• FedEx price to earnings ratios seem relatively
  low, but this below average ratio can be owing to
  the companys abnormally large earnings per
  share.
• FedEx has a debt/equity ratio a bit higher than
  of the industry.
  

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Buy or Sell?
All things considered, we, as a group, recommend
that stockholders of this company the option of
BUY/HOLD, as do the revered financial analysts.
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FedEx Beyond Package Delivery