FedEx Corporation FDX has named president and chief operating officer, Raj Subramaniam, as its new CEO, replacing founder Frederick W. Smith. The change is set to take effect Jun 1, 2022 onward.

Prior to being appointed as the president and chief operating officer of FedEx, Subramaniam had served as the president and chief executive officer of FedEx Express — FedEx’s primary segment. Having joined the company in 1991, he has served in the capacity of several other leadership roles.
Subramaniam has been named president and CEO-elect of FedEx, effective immediately. He will continue to be a part of the board.

Current chairman and chief executive officer, Fred Smith, will become executive chairman, effective Jun 1. He will be responsible for board governance as well as issues of global importance, including sustainability, innovation and public policy.

FedEx Corporation Price

FedEx Corporation price | FedEx Corporation Quote

Both Smith and Subramaniam will report to the board and the chief operating officer position will not be backfilled.

This top-management change comes at a time when supply-chain disruptions and a tight labor market are hurting FedEx’s operations. The Ground segment (the second largest segment at FedEx in terms of contribution to revenues) is taking a hit from higher operating expenses pertaining to labor market woes and wage pressures, as well as increased costs related to network expansion.

Zacks Rank & Key Picks

FedEx carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Transportation sector are as follows:

USA Truck USAK sports a Zacks Rank #1 (Strong Buy). The company’s earnings have surpassed the Zacks Consensus Estimate in three of the preceding four quarters (in line in one), the average surprise being 64.4%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of USA Truck have rallied more than 40% in the past six months.

GATX Corporation GATX also carries a Zacks Rank #1. The company has an impressive earnings surprise history. Its earnings surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 27.7%.

Shares of GATX have appreciated more than 39% in the past six months.

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