FedEx (FDX  ) announced that founder and CEO Fred Smith will step down on June 1 and be replaced by the current president and COO Raj Subramaniam. Subramanian joined FedEx in 1991 and served in multiple roles within the company including as a Director on the Board, chief marketing officer, chief operating officer, and the President of FedEx Express.

Smith, age 77, has been an iconic founder, defying the odds and building FedEx into a global behemoth. At its beginning, FedEx only had 14 planes and 389 team members, who delivered 186 packages on the first day of operations. And, there was considerable skepticism that the company's services would really be needed which obviously turned out untrue.

Over the years, it gradually grew to become one of the leading carriers with its wide network of air and ground transportation. Due to many businesses reliant on its services, its fortunes are considered a leading bellwether for economic activity.

Recently, it's prospered with increased remote work and e-commerce. It also played a major role in the successful distribution of vaccines.

Smith plans to remain involved with the company as Chairman of the Board and focus on issues like sustainability, innovation, and public policy. He started the company in 1973, beginning with delivering small parcels and documents quicker than the USPS.

Last year, FedEx had $5.2 billion in net income and revenue of $84 billion. Currently, Smith's stake in the company is worth $4.4 billion.

FedEx shares are off by about 25% from their all-time highs set in August of last year. Since then, the company has continued to deliver stellar earnings growth which means its valuation has gotten attractive with a forward P/E of 10.8 which is nearly half of the S&P 500 Index (SPY  ).

Some potential headwinds for FedEx are higher costs for fuel, labor, and vehicles which comprise 3 of FedEx's major cost centers. The positive is that some of these negatives are reflected in FedEx's stock price given the recent weakness and that the economic expansion is set to continue albeit at a slower rate which implies continued earnings growth.