Renowned delivery services provider FedEx Corporation (NYSE:FDX) announced a $5 billion share repurchase program on December 16, which includes a $1.50 billion accelerated repurchase program. However, amid continuing supply chain disruptions that are driving up shipping rates, will FDX be able to deliver robust shareholder returns in the near term? Read more to find out.FedEx Corporation (FDX) in Memphis, Tenn., is the second-largest delivery services company (in terms of revenue) in the United States. It is ranked #45 on the Fortune 500 list. Today, the company announced that it plans to repurchase $1.50 billion worth of shares from Goldman Sachs Group Inc. (NYSE:GS) as part of an accelerated share repurchase agreement. FDX is poised to buy back 4.80 million shares at the market price from GS initially. The remaining shares are expected to be purchased on a discounted basis.
The accelerated share repurchase program is part of the company’s plans to buy back $5 billion worth of shares, which it announced on December 16. This is in addition to 2.30 million shares available for repurchase under its 2016 share repurchase agreement. FDX has repurchased approximately $750 million worth of shares so far this year, as of December 16, 2021. The share repurchase agreement is expected to boost ROE and EPS for existing shareholders.
Shares of FDX have gained 1.2% in price over the past month and 1.6% over the past five days, outperforming the benchmark S&P 500 index, which retreated over this period.