Shares of FedEx Corporation (FDX - Free Report) shed 2.5% of value on Feb 15, closing the day at $179.3 following the unexpected news that its president and chief operating officer (COO), David Bronczek, will retire.
Bronczek, who has been serving FedEx in various capacities since 1976, said that it was his “personal decision” to step down. Apart from vacating the posts of president and COO, Bronczek will cease to be part of the package delivery company’s board.
FedEx announced that Raj Subramaniam will replace Bronczek as its new president and COO, effective Mar 1, 2019. He was appointed as the company’s Express division’s president and chief executive officer (CEO) last month. He succeeded David L. Cunningham as the unit’s CEO, who retired on Dec 31, 2018. Incidentally, Subramaniam will continue to discharge those responsibilities even after assuming his new role. He will also function as both FedEx Services’ co-president and its co-CEO.
The news of Subramaniam’s appointment as COO comes at a time when FedEx is suffering multiple headwinds like increased costs, trade disputes between the United States and China and a weakness in the European economy. Moreover, competition is likely to intensify for FedEx with Amazon.com (AMZN - Free Report) looking to expand its logistics network. Due to these concerns, the FedEx stock, carrying a Zacks Rank #4 (Sell), has declined 26.6% in a year’s time.
One-Year Price Performance
Given this backdrop, FedEx will be hoping that Subramaniam, who has served FedEx in various capacities for more than 27 years, will perform well in his newly assigned post and use his experience and expertise to bail FedEx out of the crisis.
Better-ranked stocks in the Zacks Transportation sector include SkyWest (SKYW - Free Report) and Frontline Ltd. (FRO - Free Report) ,each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Both SkyWest and Frontline boastan impressive earnings history, having outpaced the consensus estimate in each of the trailing four reported quarters, the average being 16.9% and 69%, respectively.
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