January 30, 2019 | Investopaper
FedEx Corporation, whose stock underperformed in S&P 500 last year could be a good acquisition for the tech and retail giant Amazon.com, research says. According to analyst Anthony Chukumba, if Amazon wants to establish itself as a shipping giant too, then acquiring the best global network can be more benefitting than investing in a cost of the building.
Statistically, he justified his analysis by presenting that “FedEx is inexpensive at 10.6x and 6.5x forward price-to-earnings and enterprise value to earnings before interest, taxes, depreciation and amortization multiples, respectively.”
FedEx stock has been underperforming in the stock market and the price has fallen under $174, a 35% drop in 12 months, although analysts have suggested that the price will go up on its own. He argues that if Amazon poses threat to the existing players in the shipping business, then it will drive a competitive response from the rivals that will eventually impact the whole industry.