FedEx downplays competitive threat of Amazon

FedEx is not too worried about the threat of competition from Amazon, according to Ken Hoexter, the Bank of America analyst who met with FedEx management this week.

“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,” said Hoexter.

Despite a dip in stocks of more than 6.6% this year, the company’s growth outlook is positive. It’s aiming for 9% revenue growth in 2019 and $1.2 billion operating income growth for FedEx Express.

The parcel delivery company predicts that its express operating margins will grow from 8.2% to the mid-teens over the next few years, and reach the high teens for ground operations.

So far FedEx’s volume has not been impacted by the Trump-instigated trade wars.

(Source: US News & World Report)