FedEx to spin off its freight trucking business

Dec 20, 2024 at 01:26 PM CST
FedEx (FDX) announced the much-anticipated spinoff of its freight trucking division on Thursday, as it restructures operations to focus on its core delivery business. Shares jumped 7% in premarket trading, adding $5 billion to FedEx's market capitalization. Analysts believe the spinoff could unlock up to $20 billion in shareholder value, while clearing the way for FedEx management to zero in on merging operations of its separate Express and Ground units to boost profits. They say FedEx Freight assets were not fully appreciated within FedEx and that spinning off the trucking business as a publicly-held entity will provide an opportunity to expand and improve its operations. Freight is one of FedEx's most profitable businesses, said Edward Jones analyst Faisal Hersi. The company trades at a relative discount to its publicly held trucking rivals like XPO and Old Dominion, meaning that making it an independent company will create value for investors, he said.

Dec 20, 2024 at 01:26 PM CST

FedEx (FDX) announced the much-anticipated spinoff of its freight trucking division on Thursday, as it restructures operations to focus on its core delivery business.

Shares jumped 7% in premarket trading, adding $5 billion to FedEx's market capitalization.

Analysts believe the spinoff could unlock up to $20 billion in shareholder value, while clearing the way for FedEx management to zero in on merging operations of its separate Express and Ground units to boost profits. They say FedEx Freight assets were not fully appreciated within FedEx and that spinning off the trucking business as a publicly-held entity will provide an opportunity to expand and improve its operations.

Freight is one of FedEx's most profitable businesses, said Edward Jones analyst Faisal Hersi. The company trades at a relative discount to its publicly held trucking rivals like XPO and Old Dominion, meaning that making it an independent company will create value for investors, he said.