FedEx Corp. (NYSE:FDX)

An analysis of valuation ratios from August 2021 through May 2026 reveals a consistent cyclical pattern characterized by a significant contraction in multiples during 2022, followed by a recovery phase and subsequent volatility.

Price to Earnings (P/E) Ratio

The P/E ratio exhibited an initial decline from 13.14 in August 2021 to a low of 11.20 in August 2022. A subsequent expansion phase saw the ratio climb to 18.13 by August 2024. The most recent period shows heightened volatility, with a peak of 18.95 in February 2026 before moderating to 16.34 in May 2026.

Price to Operating Profit (P/OP) Ratio

The P/OP ratio followed a trajectory closely mirrored by the P/E ratio, falling from 11.82 in August 2021 to a trough of 6.66 in August 2022. A recovery trend ensued, pushing the ratio to 14.24 in August 2024. A late-term peak was observed in February 2026 at 14.89.

Price to Sales (P/S) Ratio

The P/S ratio experienced a reduction from 0.77 in August 2021 to its lowest point of 0.42 in August 2022. The ratio then rose steadily, reaching 0.85 in May 2024 and attaining its maximum value of 0.92 in February 2026.

Price to Book Value (P/BV) Ratio

The P/BV ratio decreased from 2.75 in August 2021 to 1.60 in August 2022. It returned to near-initial levels by August 2024 at 2.70, eventually reaching a period high of 2.85 in February 2026 before concluding at 2.29 in May 2026.

The synchronized movement across all four metrics indicates a strong correlation in how the market valued earnings, sales, operating profit, and book value over this period. The uniform bottoming out in August 2022 suggests a period of systemic undervaluation or a sharp market correction. The subsequent rise and the simultaneous peak in February 2026 across all ratios suggest a period of maximum valuation expansion relative to the underlying financial fundamentals.

An analysis of the valuation metrics from August 2021 through May 2026 reveals a period of significant volatility in share price and a fluctuating Price-to-Earnings (P/E) ratio, while earnings per share (EPS) demonstrated a U-shaped recovery pattern.

Share Price Trends

The share price experienced a notable decline during the first year of the period, falling from 252.07 US$ in August 2021 to a low of 154.54 US$ by August 2022. This was followed by a sustained recovery that peaked at 305.02 US$ in May 2024. A subsequent correction occurred throughout 2025, with prices dipping to 225.73 US$ in May 2025, before a sharp ascent to a period high of 356.11 US$ in February 2026.

Earnings per Share (EPS) Performance

Earnings exhibited a downward trend in the initial phase, decreasing from 19.19 US$ in August 2021 to a trough of 11.90 US$ in February 2023. Following this low point, EPS recovered steadily, stabilizing within the 16.00 US$ to 18.00 US$ range from late 2023 through May 2026, ending the period at 18.74 US$.

P/E Ratio Dynamics

The P/E ratio fluctuated in correlation with market sentiment and price movements. A compressed valuation phase is observed between August 2021 and August 2022, with the ratio reaching a minimum of 11.20. Valuation expanded significantly starting in early 2023, with the P/E ratio climbing to 18.13 by August 2024, suggesting an increase in the premium investors were willing to pay per dollar of earnings.

Valuation Divergence and Peaks

A notable divergence occurred between November 2025 and February 2026, where a rapid increase in share price outpaced the growth in EPS, driving the P/E ratio to its maximum value of 18.95. This peak was followed by a moderation to 16.34 by May 2026, indicating a normalization of the valuation multiple after the sharp price surge.

The Price to operating profit (P/OP) ratio exhibits significant volatility over the analyzed period, characterized by distinct phases of valuation contraction and expansion. While operating profit per share remained relatively stable, fluctuating within a narrow band between 19.56 US$ and 24.03 US$, the valuation multiple was primarily driven by substantial movements in the share price.

Initial Valuation Contraction (August 2021 – August 2022)

A marked downward trend in the P/OP ratio is observed during this period, declining from 11.82 to a series low of 6.66. This compression was primarily the result of a sharp decrease in the share price, which fell from 252.07 US$ to 154.54 US$, while operating profit per share remained resilient, peaking at 24.03 US$ in May 2022.

Recovery and Expansion Phase (August 2022 – May 2024)

The valuation multiple underwent a consistent recovery, rising from 6.66 to 13.40. This expansion was driven by a strong recovery in the share price, which reached 305.02 US$ by May 2024. During this phase, the P/OP ratio surpassed its initial 2021 levels, indicating a higher market premium attributed to the company's operating earnings.

Cyclical Fluctuations and Peak Valuation (August 2024 – May 2026)

The latter part of the period is characterized by cyclical volatility. A brief correction saw the ratio dip to 10.04 by August 2025. This was followed by a rapid ascent to the series peak of 14.89 in February 2026, coinciding with a share price peak of 356.11 US$. The period concludes with a slight moderation to 13.26 as of May 2026.

Relationship Between Profitability and Valuation

The analysis reveals a low correlation between short-term changes in operating profit per share and the P/OP ratio. Because the operating profit per share remained consistently between approximately 19 US$ and 24 US$, the fluctuations in the P/OP ratio serve as a proxy for changes in market sentiment and share price volatility rather than fundamental shifts in operating efficiency.

The valuation of the company's common stock, as measured by the Price to Sales (P/S) ratio, exhibits significant volatility between August 2021 and May 2026. This volatility is primarily driven by fluctuations in the share price rather than changes in revenue efficiency, as sales per share maintained a consistent upward trajectory throughout the analyzed period.

Sales per Share Performance

A steady growth trend is observed in sales per share, which increased from 326.15 US$ in August 2021 to 400.37 US$ by May 2026. This consistent rise indicates a sustained growth in revenue generation relative to the number of outstanding shares, providing a stable baseline for valuation.

Share Price Fluctuations

The share price experienced several distinct cycles. An initial decline occurred from August 2021 (252.07 US$) to a low of 154.54 US$ in August 2022. This was followed by a recovery phase that peaked at 305.02 US$ in May 2024. A subsequent period of volatility saw the price reach a high of 356.11 US$ in February 2026 before settling at 306.22 US$ in May 2026.

P/S Ratio Analysis

The P/S ratio mirrored the volatility of the share price, starting at 0.77 in August 2021 and reaching a period low of 0.42 in August 2022. This contraction occurred despite rising sales per share, suggesting a market-driven devaluation of the company's revenue stream during that period. The ratio recovered to a peak of 0.85 in May 2024, dipped again to 0.60 in August 2025, and reached its highest point of 0.92 in February 2026. The final recorded ratio of 0.76 in May 2026 indicates a return to valuation levels similar to those seen at the beginning of the reporting period.

The inverse relationship between the steady growth of sales per share and the fluctuating P/S ratio highlights that the market's valuation of each dollar of sales shifted repeatedly. The most significant compression occurred in mid-2022, while the highest premium was placed on sales in early 2026.

An analysis of the valuation metrics reveals a divergence between the steady growth of the intrinsic book value and the volatility of the market price, resulting in a fluctuating Price to Book Value (P/BV) ratio over the observed period from August 2021 to May 2026.

Book Value per Share (BVPS) Trend

A consistent upward trajectory is observed in the book value per share, which increased from 91.55 US$ in August 2021 to 133.77 US$ by May 2026. This steady progression indicates a sustained growth in the company's net asset base relative to the number of shares outstanding, reflecting a strengthening of the underlying equity position.

Price to Book Value (P/BV) Volatility

The P/BV ratio experienced significant cyclical movements, reflecting shifting market sentiment and valuation premiums. An initial contraction occurred between August 2021 and August 2022, where the ratio dropped from 2.75 to a period low of 1.60. This was followed by a recovery phase that peaked at 2.61 in November 2023. A second decline ensued, reaching 1.90 in May 2025, before a sharp spike to a period high of 2.85 in February 2026. The period concluded with a correction to 2.29 in May 2026.

Correlation Between Share Price and Valuation Multiples

The fluctuations in the P/BV ratio are primarily driven by share price volatility rather than changes in book value. For instance, the peak ratio of 2.85 in February 2026 coincided with the highest share price of 356.11 US$, despite the BVPS growing at a more linear rate. Conversely, the valuation trough in August 2022 was a direct result of the share price falling to 154.54 US$ while the book value remained stable.

Overall Valuation Summary

The company consistently traded at a premium to its book value throughout the entire period, with the ratio never falling to or below 1.00. The movement of the P/BV ratio suggests a market valuation that oscillates between a conservative multiple of approximately 1.6x and an expanded multiple of nearly 2.9x, while the underlying asset value per share grew by approximately 46% over the five-year span.