FedEx Corp. (FDX.N) tumbled to the lowest in 18 months after Bank of America Corp. said a surprise executive departure from the courier’s air-freight division signaled a key financial goal is at risk.

Bank of America analyst Ken Hoexter cut his recommendation on FedEx to neutral and lowered his price target 28 per cent after the resignation of David Cunningham as head of FedEx’s Express unit. Hoexter also cited a “decelerating global economy” as he estimated that the division would miss its target of boosting profit by more than US$1 billion by 2020.

Cunningham’s departure after a tenure of just two years “could signal a reduction or delay in its profit improvement target,” Hoexter said Monday in a note to clients. “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.”

The analysis spurred concerns among investors about the outlook for FedEx, which is an economic bellwether as the world’s largest cargo airline. Citigroup Inc. analyst Christian Wetherbee said last week that Cunningham’s exit, which was announced Dec. 7, increased the likelihood of a disappointing forecast from FedEx when the company reports quarterly results on Dec. 18 amid the peak holiday shipping season.

FedEx declined to comment on the personnel change or the analysts’ remarks.

Long Careers

The shares dropped 3.4 per cent to US$194.40 at 2 p.m. in New York after sliding to as little as US$188.51 for the lowest intraday price since May 2017. FedEx fell 19 per cent this year through Dec. 7, compared with a 12 per cent drop for United Parcel Service Inc. and an 11 per cent slide for Standard & Poor’s index of industrial companies.

Cunningham’s predecessor, David Bronczek, led the Express division for 17 years before being named FedEx president and chief operating officer in February 2017. Cunningham, 57, was president of the Express unit’s Asia Pacific division from 1999 until he was named chief operating officer of that division in 2015.

Cunningham was named to the top Express job in January 2017, when he was praised in a company statement for progressing through the ranks of leadership at the shipping company over a 30-year career. The executive plans to retire effective Dec. 31 and will be succeeded by Raj Subramaniam, who is currently executive vice president and chief marketing and communications officer of Memphis, Tennessee-based FedEx.

Hoexter said he now expects a US$700 million boost in operating income at FedEx’s Express division by 2020 compared with 2017, down from his earlier estimate of US$1.05 billion. FedEx had targeted a gain of as much as US$1.5 billion during the period, he said in a report Monday.