FedEx Corporation (NYSE: FDX ) stock is down more than 6.6 percent in 2018, and the threat of competition from ( AMZN ) is a big reason why. However, Bank of America analyst Ken Hoexter met with FedEx management this week, and the company insists that Amazon is more friend than foe.

Hoexter says FedEx still has a number of long-term advantages over Amazon and other competitors, and the company has a fairly impressive growth outlook. FedEx is targeting 9 percent revenue growth in fiscal 2019 and at least $1.2 billion in its express unit's operating income growth.

Management said its ground operations can eventually grow operating margins into the upper teens, a slightly more optimistic outlook than the mid-teens target the company previously discussed.

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FedEx is expecting margin improvements for express as well. The company says express margins will expand from 8.2 percent in fiscal 2018 to the mid-teens over the next several years.

While the financial outlook for FedEx seems compelling on the surface, Amazon’s entry into the delivery business is the elephant in the room for FDX stock at the moment. Dealing with Amazon is understandably scary for FedEx investors, but the company says Amazon will continue to be more of a partner than a rival.

“FedEx continues to see Amazon as a partner and customer, arguing that it would be exceedingly difficult for the e-commerce giant to match FedEx’s density, and that it cannot envision Amazon being able to compete on cost,” Hoexter says.

The other wildcard for FedEx in recent months is the international trade war, but the company said this week that volumes have not been impacted up to this point and its current fiscal year is off to a strong start.

With the stock down 13 percent from its June highs, sentiment may be a bit too low for FDX stock given its current valuation.

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“With shares at just 13x our [fiscal 2019] EPS target of $17.25, near the low-end of its historical 13x to 19x forward PE range, we believe FDX offers an attractive risk-reward given the double-digit EPS growth we target for [fiscal 2019] and [fiscal 2020],” Hoexter says.

Bank of America has a “buy” rating and $310 price target for FDX stock.

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Raymond Mitchell, Author

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