FedEx Corp. (NYSE: FDX) is spreading its wings and preparing to take flight as the company looks to expand further into Europe with its most recent acquisition. The company has experienced steady growth over the past couple of years, and this key independent research firm sees this continuing.

Argus has a Buy rating for FedEx with a $205 price target, up from $195. The reasoning behind the rating is that this large-cap blue-chip industrial company has been benefiting from strong domestic economic growth. The company’s well-respected management team continues to plow cash back into operations, which the firm thinks sets the stage for future efficiencies and margin improvement.

The company is also in the early stages of modernizing its fleet of aircraft to more fuel-efficient models that require less maintenance, which also could help boost margins. Argus also expects the recently announced acquisition of TNT Express, if approved, to enhance the company’s competitive position in Europe.

On April 7, FedEx announced that it would acquire Dutch-based parcel services company TNT Express. The deal is still subject to approval by EU regulators. If approved, the deal would enhance the company’s position in the European delivery market. FedEx already has a sizable air express delivery operation in Europe, but is lacking a solid ground delivery business.

Looking ahead, the company provided guidance for fiscal 2016. It expects earnings per share (EPS) to be in the range of $10.60 to $11.10. Capital spending is expected to be $4.6 billion, up from $4.2 billion in fiscal 2015. The outlook assumes moderate economic growth and does not include any costs or results related to the TNT Express acquisition.

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According to Argus:

We think that FDX shares are attractively valued at current prices near $176. The shares are trading toward the high end of their 52-week range of $145-$185, but we see momentum for additional earnings surprises and stock market gains. On a technical basis, the shares had been in a bullish trend of higher highs and higher lows that dated to September 2012, though more recently they have been range-bound between $170 and $180.

Shares of FedEx were up about 0.3% at $176.45 on Monday morning. The stock has a consensus analyst price target of $196.21 and a 52-week trading range of $145.08 to $185.19.

FedEx shares have outperformed the market over the past quarter, increasing 3% while the S&P 500 has gained 2%. Over the past year, the shares have also outperformed, with a gain of 20%, versus an 8% increase for the S&P 500.

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