Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
FedEx Corp., FCFF calculation
US$ in millions
Based on: 10-K (reporting date: 2026-05-31), 10-K (reporting date: 2025-05-31), 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31).
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Financial analysis of cash flow metrics from May 31, 2021, to May 31, 2026, indicates a period of contraction in liquidity followed by a projected recovery in firm-level cash generation.
- Operating Cash Flow Trends
- Cash provided by operating activities experienced a consistent downward trajectory for five consecutive years, decreasing from 10,135 million US$ in 2021 to a trough of 7,036 million US$ in 2025. A recovery is observed in 2026, with values returning to 8,925 million US$.
- Free Cash Flow to the Firm (FCFF) Performance
- FCFF demonstrated significant volatility, declining sharply from 4,946 million US$ in 2021 to 3,245 million US$ by May 31, 2023. Following this decline, the metric remained relatively stagnant between 2024 and 2025, before exhibiting a substantial increase to 5,830 million US$ in 2026, surpassing all previous levels in the period.
- Analysis of Cash Flow Conversion
- The relationship between operating cash flows and FCFF reveals a shifting pattern of capital expenditure. The divergence between these two metrics peaked in 2022, suggesting higher capital intensity during that period. Conversely, the gap narrowed significantly by 2026, indicating that the surge in FCFF is supported by both an increase in operating cash and a reduction in the capital required to maintain or expand the firm's asset base.
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Interest Paid, Net of Tax
FedEx Corp., interest paid, net of tax calculation
US$ in millions
Based on: 10-K (reporting date: 2026-05-31), 10-K (reporting date: 2025-05-31), 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31).
2 2026 Calculation
Cash payments for interest, net of capitalized interest, tax = Cash payments for interest, net of capitalized interest × EITR
= 881 × 23.50% = 207
3 2026 Calculation
Capitalized interest, tax = Capitalized interest × EITR
= 52 × 23.50% = 12
The financial data indicates a fluctuating trend in interest-related cash outflows and tax obligations between 2021 and 2026. A primary observation is the U-shaped trajectory of net cash payments for interest, which declined initially before entering a sustained growth phase.
- Cash Payments for Interest
- Net cash payments for interest decreased from 642 million USD in 2021 to a minimum of 514 million USD in 2023. Following this trough, a consistent upward trend is observed, with payments rising to 552 million USD in 2024 and reaching 674 million USD by 2026.
- Capitalized Interest
- Capitalized interest expenditures remained relatively stable through 2024, reaching a peak of 60 million USD. A subsequent contraction is evident in the final two years of the period, with values falling to 41 million USD in 2025 and 40 million USD in 2026.
- Effective Income Tax Rate
- The effective income tax rate experienced a period of increase, rising from 21.6% in 2021 to a peak of 25.9% in 2023. This was followed by a gradual decline to 25.8% in 2024, 24.8% in 2025, and 23.5% by 2026.
An inverse relationship is observable between capitalized interest and cash interest payments beginning in 2024. As capitalized interest declined from its peak, there was a corresponding acceleration in cash payments for interest, suggesting a potential shift in the treatment of interest costs or a reduction in qualifying capital expenditure projects.
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Enterprise Value to FCFF Ratio, Current
FedEx Corp., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in millions) | |
| Enterprise value (EV) | 86,533) |
| Free cash flow to the firm (FCFF) | 5,830) |
| Valuation Ratio | |
| EV/FCFF | 14.84 |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| Uber Technologies Inc. | 14.99 |
| Union Pacific Corp. | 31.65 |
| United Airlines Holdings Inc. | 14.39 |
| United Parcel Service Inc. | 19.73 |
| EV/FCFF, Sector | |
| Transportation | 20.03 |
| EV/FCFF, Industry | |
| Industrials | 31.80 |
Based on: 10-K (reporting date: 2026-05-31).
1 Click competitor name to see calculations.
If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
FedEx Corp., historical EV/FCFF calculation, comparison to benchmarks
| May 31, 2026 | May 31, 2025 | May 31, 2024 | May 31, 2023 | May 31, 2022 | May 31, 2021 | ||
|---|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||||||
| Enterprise value (EV)1 | 84,849) | 68,327) | 88,219) | 77,708) | 70,008) | 92,612) | |
| Free cash flow to the firm (FCFF)2 | 5,830) | 3,634) | 3,748) | 3,245) | 3,660) | 4,946) | |
| Valuation Ratio | |||||||
| EV/FCFF3 | 14.55 | 18.80 | 23.54 | 23.94 | 19.13 | 18.72 | |
| Benchmarks | |||||||
| EV/FCFF, Competitors4 | |||||||
| Uber Technologies Inc. | — | 14.74 | 23.26 | 46.69 | 136.28 | — | |
| Union Pacific Corp. | — | 27.64 | 25.72 | 31.90 | 23.83 | 26.41 | |
| United Airlines Holdings Inc. | — | 12.41 | 9.17 | 56.36 | 11.88 | 79.24 | |
| United Parcel Service Inc. | — | 20.68 | 16.32 | 25.28 | 16.83 | 16.98 | |
| EV/FCFF, Sector | |||||||
| Transportation | — | 18.33 | 19.19 | 32.19 | 21.84 | 24.82 | |
| EV/FCFF, Industry | |||||||
| Industrials | — | 29.85 | 31.37 | 25.97 | 24.33 | 28.81 | |
Based on: 10-K (reporting date: 2026-05-31), 10-K (reporting date: 2025-05-31), 10-K (reporting date: 2024-05-31), 10-K (reporting date: 2023-05-31), 10-K (reporting date: 2022-05-31), 10-K (reporting date: 2021-05-31).
3 2026 Calculation
EV/FCFF = EV ÷ FCFF
= 84,849 ÷ 5,830 = 14.55
4 Click competitor name to see calculations.
The analysis of the Enterprise Value (EV) to Free Cash Flow to the Firm (FCFF) ratio reveals a cycle of valuation expansion followed by a distinct trend toward compression. The ratio experienced an upward trajectory between 2021 and 2023 before trending downward toward its lowest point in the observed period by 2026.
- Enterprise Value Fluctuations
- Enterprise value demonstrated significant volatility over the period. After an initial decline from 92,612 million in 2021 to 70,008 million in 2022, a recovery phase occurred, peaking at 88,219 million in 2024. This was followed by a sharp contraction to 68,327 million in 2025 and a subsequent rebound to 84,849 million in 2026.
- Free Cash Flow to the Firm (FCFF) Performance
- A downward trend in FCFF was observed from 2021 to 2023, with values decreasing from 4,946 million to a low of 3,245 million. A period of relative stability followed between 2024 and 2025, with cash flows remaining within the 3,600 to 3,800 million range. A substantial increase is noted by 2026, where FCFF reached 5,830 million, indicating a significant improvement in the firm's capacity to generate cash.
- EV/FCFF Ratio Dynamics
- The EV/FCFF ratio expanded from 18.72 in 2021 to a peak of 23.94 in 2023, suggesting that the enterprise value was priced higher relative to its cash flow generation during this time. Following 2024, the ratio entered a phase of steady compression, falling to 18.80 in 2025 and further to 14.55 in 2026. This reduction in the multiple is primarily attributed to the strong growth in FCFF outpacing the growth in enterprise value toward the end of the analyzed period.
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