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FedEx coming with results it's seen as economic bellwether even as it clearly has its own issues to work through, namely this overhaul of its businesses. Lee Costco is our senior Transport Logistics and Shipping Analyst here at Bloomberg Intelligence. And Lee, a good report here from FedEx whose shares are right now up about 2%, a forecast that came in better than most people expected, including the range that it offered.
Lee Costco
Yeah, it definitely was a nice print for their third quarter, which is includes their peak season in December. You know it shows us that they're really executing on their plan. The beat was really driven by their express business or their parcel business. Their freight business, which is their less than truckload business, continues to struggle. That's really not a company specific thing, that's an industry thing. The LTL market has been pretty weak over the last year and we expect that weakness to continue. I Think people were encouraged about the fact that they raised their full year guidance. You know, they did put out a $25 EPS target for 2029 when they had their analyst day a couple of months ago. You know, we've written over the last month that, you know, we think that might be conservative if, if the company continues to execute on its restructuring plan and assuming that, you know, the economy doesn't crater from here all in a recession, you know, I think that, you know, its numbers can be, can be made.
Paul
Lee, I knew it looks that some of my banker buddies got to this company at some point because they are going to spin off their freight unit, I guess sometime in June. What are you looking for there? What's the, what's what. What's the story there, do you think?
Lee Costco
Yeah, so I think they're following the footsteps of ups. UPS also had a less than truckload business. They spun out, they sold, excuse me, to tfi, a Canadian company. And you know, I think what these parcel carriers want to do is they want to focus on, you know, that they're parcel carriers and not some of these ancillary businesses. You know, I think this will really sharpen FedEx's focus. The LTL business or the FedEx's LTL business is a great business. It's the largest less than truckload carrier in North America. It'll be an interesting spin off. I mean, we'll see where valuations are by the time they spin it off in June. You know, like I mentioned, tonnage has been kind of depressed. So obviously maybe they're not getting the most that they possibly can, I mean, because of the timing. But I think it is, it is a good thing for them to do. And only doing that, you know, they're doing things that, that they, that was, you know, unheard of maybe three, five years ago. You know, they're combining their air and ground networks and they're doing things within their businesses to really drive overall productivity. You layer on top of that technology investments to enhance productivity. You know, this could be a company that can, you know, generate earnings, you know, north of that $25 number that they put out for 2029.
Bloomberg Host
Lee, final question to you. We have about 30 seconds left. We know FedEx has sued the federal government for refunds on tariffs. Any update, any progress on that front? Is this a meaningful number?
Lee Costco
Yeah, honestly I don't know much about that. They really didn't talk that much about it on the earnings call. But it probably would be a pass through that they get back to their customers, so it's not really going to impact their bottom line. And if it does, it'll probably be not meaningful.
Bloomberg Host
Stay with us. More from Bloomberg Intelligence coming up after this.
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Paul
While a potential mega M and a trade reported today potential Unilever is in talks to sell its food business to McCormick in what would be the biggest overhaul of the company since it was founded almost a century ago. We're talking this business could be worth about US$33 billion. So that would be a sizable trade there for sure. Let's get down into the details here. We can do that with Diana Gomes. She is a senior equity research analyst at Bloomberg Intelligence. She's based in London. Diana, this would be a big, big move for Unilever. What's, what's the strategy here?
Diana Gomes
Yes, thank you. So the, the strategy for Unilever Unilever would be really to simplify and refocus more on the higher growth premium skincare well being beauty portfolio, which is what the company is trying to do in order to reach about two thirds of sales in the midterm. So it is not surprising that Unilever is considering a split. I believe the questions are more how that will be structured.
Paul
So is this a move? I mean I see the stocks up just fractionally today. Is this something that was expected by the Street? Is this something the street would support? Is this a valuation that seems reasonable?
Diana Gomes
So the valuation we came up with we calculated a potential nine times to EBIT multiple on potential 3.2 billion euros of EBITDA in 2026 for the foods business as part of Unilever, which would be aligned with packaged food multiples and slightly below Unilever's multiple at the moment. Which accounts for the fact that foods has been a slower growth segment for Unilever. But it's still margin accretive, it's cash accretive. So a quick sale at a non favorable value would not be something that I see Unilever working for. But in prior days we have seen more chatter in the market about Unilever potentially speeding up some considerations for a split, a spin off a sale. There are many hypotheses being put out there so it is not coming as a complete surprise. I believe the details are quite thin at the moment, so it's difficult to, to say.
Paul
So I think we've seen a lot in the consumer products state space just over the last several weeks, several months, a lot of companies reexamining kind of their, their portfolio of brands. And because there's been a lot of competition from private label, there's been, you know, a lot of inflation out there that's been pinching the consumer. It seems like a lot of these companies are reexamining their portfolios. Should we expect more of this going forward?
Diana Gomes
Yes, definitely. So that's a trend that we see continuing through, through the year. And it is also possible that the current uncertain environment from the geopolitics risk potential boost to inflation as well, which would further squeeze consumers is prompting strategic thoughts as well. We and that's that's the backdrop under which this this comes. So so not completely surprised given that foods would potentially be the segment more vulnerable in Unilever's portfolio. But companies have been trying to simplify and get more focus so that the investment in their premium innovation allows them to better differentiate themselves from private label or more affordable options in the market, sometimes from smaller players.
Paul
So Diana, who's typically investing in these big consumer products, companies like Procter and Gamble, Unilever, because I see their stock prices are kind of flattish over time, not a lot of movement. They do have nice dividend yields 3, 4, 5% are these investors that in their portfolio they just want these stocks to represent stability.
Diana Gomes
That is one of the key elements that Staples had been known for for that stability on income and stability. Some attractive dividend yields as well. So we see further buybacks and dividend growth still possible into into the year. But obviously with the potential for volume growth to not pick up as much as was initially expected pre the war does raise some questions there.
Bloomberg Host
Stay with us. More from Bloomberg Intelligence coming up after this.
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Paul
Let's go over to the consumer side. When you think about where consumers spend money, well, for enjoyment and entertainment and all that kind of stuff, they can go take a cruise, they can go to a casino, go to a theme park, all that kind of stuff. But if the consumer may face some additional challenges going forward, what does it mean for those businesses? What does it mean for those businesses? Credits out there, Jodi Laurie, she's a Bloomberg Intelligence credit analyst. Jodi, how do you think about some of the industries you follow? Again, kind of the cruise industry, the gaming industry, the theme park business, hotels, all that kind of stuff. What's your view of the consumer and what are your companies telling you?
Jodi Laurie
So I think, Paul, there's a couple of things to tackle here. First of all, of course there's the pressure from the Iran war which at the end of the day, I think there's more of an echo effect event and it's more just adding to some of the pressures that the consumer is already feeling. We've been talking about the K shaped economy. We've been seeing some of the effects of the K shaped economy in hotels, in theme parks, in cruise lines, in gaming. But we haven't necessarily seen a broader scale effect of this inflation pressure on the consumer when it comes to higher income consumers. And so I think that's where you're going to start seeing a little bit more of, of that creep in and that pullback by the consumer. But I think at the end of the day when you look at the companies, a lot of them are really well positioned. It's only the lowest rated companies that we are concerned about, the ones that are operating on a tight sort of cushion at the moment, such as Six Flags, such as Hertz, the names that really are trying to get their balance sheets in order and trying to address fundamental issues at their companies that we're concerned about at this moment.
Diana Gomes
Right.
Bloomberg Host
Especially when you look at, especially when you look at the fact that traders are now betting on the possibility of a rate hike as well. Not only have they priced out rate cuts for the rest of this year, they're now looking at possibly the Fed needing to increase interest rates because of rising inflation. A rate hike would really be bad news for a lot of these weak borrowers with a lot of debt coming up. Wouldn't.
Jodi Laurie
Would. Absolutely, Scarlet. And I think, I think the key here though is that a lot of the companies have been proactive in terms of deleveraging. And so for 2026, we actually don't have that much debt outstanding for a lot of the companies that we cover. It's really as you get into 2027, 2028, when it's that prolonged sort of view, that's when you start feeling the pressure. If this is a sort of, you know, one year blip or so, I don't think it's really going to affect them. I mean, we did an analysis on a company like Carnival, for example, which, you know, they've been working their way towards investment grade ratings. They obviously are feeling the strain of something like Iran and it's going to possibly affect booking levels for a lot of their consumers. But at the end of the day, for, for someone like Carnival, they've been proactively deleveraging, which is certainly a positive. And when we've looked at similar times in the past, it really has an effect. EBITDA margins, that much net income might be a different story, but EBITDA margins, not that much, which is a little surprising for us, I think, where we're sort of hesitant to feel really comfortable for a company that's unhedged on their fuel exposure is more in that secondary and tertiary effects related to something like this massive event and also the consumer feeling pressure by that, I mean, as consumers, if they're not spending on the scuba diving, if they're not spending on the random excursions, the same way you're not going to have that gravy of cash flow that lot of these companies feel.
Paul
It's the first weekend of March Madness, which makes me think about sports books. And my favorite sports book in Vegas is At Caesars Palace. It is just awesome. They take care of you there. And I notice, Jody, that Caesars is, I guess there's some reports that maybe they were going to be taken private by Tillman. Fertitta. What does that mean for its bonds? What does that mean for bonds of other kind of leisure companies out there?
Jodi Laurie
Well, Paul, we've been a little bit concerned about some of our companies just because we're towards that tail end of a really good momentum of the past few years post Covid. And so for someone like Caesars, while they do have change of control provision, which what that is is that's a protection measure for anybody who owns their bonds to put back the bonds at 101% of par. While those bonds do have that, there's reports by Wall Street Journal and others that indicate that Caesars may have found loopholes around their with Vici Properties, which is the one that owns about 50% of their properties. They have a sale leaseback with Vici. So not to get into too much detail, but if they're, if they're looking at ways to skirt conversations with key counterparties, I'm a little bit concerned when it comes to creditors, particularly when you look at where the bonds are trading and they're trading so much below par. I think that's a sign that maybe perhaps whatever deal might be forming is not necessarily going to be creditor friendly. Then if you think about Caesars in general, the long history legacy Caesars, what happened with their lbo, what happened with their restructuring. Now we have El Dorado as the management team. They're the ones who bought Caesars and took on the Caesars name. At the end of the day though, I think a lot of investors have a hard time getting over a name that burned them in the past. Feeling comfortable with this discussion going forward. We have a lot of companies within our sectors. We actually just published something yesterday on it, looking at the risk related to activists and investors for a lot of our companies and what that could mean for these credits.
Paul
Stay with us. More from Bloomberg Intelligence coming up after this.
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Sports Analyst
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Paul
The business of Sports Nobody does it better than our next guest, Randall Williams, US Sports Business Reporter for Bloomberg News. He doesn't mail it in from home like the rest of these folks. He's live in the Bloomberg Interactive Broker studio and we appreciate that. Randall, I'm so glad you're here because to me I've been following closely this WNBA collective bargaining agreement because what I I think we've all noticed over the last several years is just the explosive growth of women's national best women's sports in general, but certainly the WNBA and boy I did not think the economics for them reflected that does I mean agreement.
Sports Analyst
I remember when Caitlin Clark was drafted, I think all of us, Bloomberg included, ran the story that she was going to be making either was $76,000 or $78,000. You think about the growth that she brought to the league as well as many many others. I mean the league was growing before she arrived as well and then she and her rookie class angel Reese and Cameron Brink and so many more served as a tidal wave and so their salaries didn't reflect that but they will soon.
Bloomberg Host
They will soon. But there was a lot of bad blood between the commissioner, Kathy Engelbert, and the players and the players union leading up to, you know, the agreement that they'll come to something together. Where do they go from here? Because I wonder how much of that kind of casts a pall over how they work together going forward.
Sports Analyst
It's a great question. And I, I think there was a picture that was posted, but I want to say it was by the women's, the union side of things. And they toasted when they got a deal and everyone looks happy. And of course, they have to have a deal in order for the league to continue.
Diana Gomes
Right.
Sports Analyst
At the same time, there were some very, very strong comments made that, you know, in all my years of covering sports, both professionally and then as a kid, I've never heard anyone make comments like Nafisa Collier said about Kathy Engelbert. And, you know, we also reported that Kathy had conversations about whatever her next chapter was, meaning that she could depart the league. Now, is that still a factor now that a deal is close to being done? We're going to find out probably in the months and maybe a year or so to come. I think that the next time she talks will be at the WNBA draft, and I have no doubt that someone will ask about it.
Paul
Well, we know across sports, globally, the main, main driver of the economics is the rights fees, media rights fees. Where's the WNBA these days?
Sports Analyst
So that was a big part of this, was that the WNBA agreed to a new media rights deal, I believe it was in 2024 with Amazon, ESPN and Comcast. And so that deal is going to pay them at minimum, $200 million a year. And okay, so when the players were having conversations about it, they're like, listen, we're seeing expansion fees rise. We're seeing our media rights field fees rise. And so they were like, if all of this money is rising, where is it? When is it going to come down to us? And the league and the players saw too completely different ways for a long time, but they got a middle ground.
Bloomberg Host
All right. And it's about time, frankly.
Paul
I agree.
Bloomberg Host
I mean, let's talk about college basketball, because it is March. March 20th, and March Madness is in full swing here at Bloomberg. Of course, we have our brackets for a cause. If you have a Bloomberg terminal, it's br kt Go where we've invited folks to put together their bracket and appoint the charity that would get a winning donation if they do come out ahead. And these are always full of Surprises?
Sports Analyst
Absolutely. I mean, yesterday we saw Duke almost get upset by almost being the key word there. It was. I was at a CBS watch party yesterday, and everyone was on edge. And then, of course, BYU lost to Texas. And so that first round and that second round are always, always dangerous. And I mean, Ken Griffin is leading right now. So, I mean, it sounds like if he continues down this track, you know, he'll be the winner.
Paul
I am close on his heels. I'm in the top 4%.
Sports Analyst
How many points do you have right now?
Paul
26. I'm 568 out of 12,872 people. I have Duke winning. I just pencil in Duke, then I work backwards. Oh, and yesterday, let's not forget Carolina Lawson.
Sports Analyst
Oh, here we go. Where'd you go to school again, in case anybody.
Paul
Yeah, exactly. So it was a very good day yesterday. So how big is this for, you know, the media side of the business? Because it just seems a lot of people are concerned and upset with college athletics in general because it's maybe gone swung too far the other way with NIL and the transfer portal, and it's lost some of its cachet a little bit. Are we seeing that in the numbers anywhere?
Sports Analyst
I think you're seeing it across competition more than you are with the numbers because, I mean, you look at Duke's game yesterday, again, I don't want to shame you because they came out on top, but, you know, you have more of these results and more upsets happening because college players are being paid more. So they have the choice to go and play for a smaller school that might be close to home or maybe go somewhere far away that offered them an incredible price. Now, from the media rights perspective, Duke loses, and I can guarantee you there are media executives who are not going to be happy. And so Duke, Kansas, all the blue chip schools, the farther they go, normally, the better the rights, the better the ratings.
Bloomberg Host
And because of name, image and likeness, these athletes and the transfer portal, these athletes can go to school where last year, you know, wasn't even on the map. So which schools look most interesting based on the players? The players who have come over from other teams.
Sports Analyst
Which schools? Look, I need to be in college to answer that question because ultimately I would jump school. I would jump schools every single year if someone was paying me more. That's the right thing to do. I mean, that's. Unfortunately, that's the manipulative part of this, is that if you are in the transfer portal, let's say you make $80,000 your freshman year, then you make 120, then you have a good season that same sophomore year. Now someone's offering you $500,000. Now you're offering, now you're being offered a million dollars. Why wouldn't you try to be a college basketball player for as long as you possibly could if you have no aspirations or you're not good enough to go to the NBA? And that's what's happening.
Paul
And that ties into a story that Janet Lauren had yesterday from Bloomberg News about some of these kids leaving the Ivy League, which didn't used to happen. No, because they can then, because Ivy League does not play pay nil money. But if you have a good season, Ivy League, maybe a power school will pay you. So, boy, it's, it's a whole new world. I would again, I just kind of characterize it as the Wild west.
Sports Analyst
And it is the wild West.
Paul
There needs to be some regulation and I think we're starting to move that way. There's a growing recognition there.
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Date: March 20, 2026
Hosts: Paul Sweeney, Scarlet Fu
Key Guests: Lee Costco (Senior Transport Logistics & Shipping Analyst), Diana Gomes (Senior Equity Research Analyst), Jodi Laurie (Credit Analyst), Randall Williams (US Sports Business Reporter)
This episode focuses on FedEx's latest earnings report amid a major operational overhaul, its raised profit outlook, and the broader implications for investors. The show also touches on Unilever's potential food business sale, consumer sector pressures, and major developments in the business of sports, including the WNBA's collective bargaining agreement and the college basketball landscape.
(Main Segment: 01:56–05:21)
(Segment: 07:44–12:47)
(Segment: 15:09–20:44)
(Segment: 18:41–20:44)
(Segment: 23:07–29:13)
This episode provides a comprehensive update on FedEx’s transformation and improved outlook, highlights evolving strategies by giants like Unilever, examines consumer pressures in key leisure sectors, and explores rapidly changing economics in women’s sports and college athletics. Filled with analyst insight and direct-from-the-field expertise, it delivers actionable intelligence for investors and market watchers alike.