Stock in the company had been fairly stable over the course of the previous month, ranging from around $220 per share to $295.95 per share, but by the end of market trading on Friday, the day of the announcement, shares had fallen to $201.35.
BAML lowered its rating on FedEx stock from “neutral” to “buy,” while cutting its price target from $304 to $220, causing shares to tumble at close of trading on Monday another 4.2 percent to $192.93, its lowest price since May of 2017.
“The company made a surprising change to its Express CEO, which we believe could signal a reduction or delay in its profit improvement target,” analyst Ken Hoexter wrote in a widely circulated client advisory note.
“This is a rapid and, in our view, out-of-character change for a company that is still operated by its founder, chairman and CEO Fred Smith,” he said. “Given Mr. Cunningham, who is 57 years old, had run the company’s Asia-Pacific Region and was on the company’s Strategic Management Committee, the unexpected retirement could indicate a potential miss on Express operational targets.”
According to company figures, FedEx Express accounted for 55 percent ($36.2 billion) of $65.5 billion in overall revenues for its fiscal 2018 year.