Amazon will acquire Target, analyst Gene Munster predicts

Amazon To Buy Target? That's Loup Ventures' 'Boldest' Prediction For The Year

Amazon To Buy Target? That's Loup Ventures' 'Boldest' Prediction For The Year

Amazon.com is tipped to move into retail stores this year with the acquisition of Target a leading U.S. analyst has tipped. But Amazon would need to dig deep to determine whether Target's operations are worth the expense, according to Jim Fosina, CEO of Fosina Marketing Group.

The Loup Ventures analyst Gene Munster predicts Amazon will acquire Target in 2018.

On Monday, Gene Munster from Loup Venture wrote, "Amazon believes the future of retail is a mix of mostly online and some offline".

As for when this might happen, if it does, Munster said, "Getting the timing on this is hard, but seeing the value of the combination is easy".

After aquiring Whole Foods, Amazon gained a 470-store presence for shoppers. As of the time of writing, Amazon and Target have yet to comment on the speculation. Amazon already bought Whole Foods, and according to the prediction, it's not done with traditional retailers.

Target Australia is creating big headaches for owner Wesfarmers and has contributed to its share price underperformance with the stock recording a relatively paltry 4.5% gain over the past year, despite strong coal prices and strength in its Bunnings chain. Year-to-date, AMZN has declined 0.00%, versus a 0.31% rise in the benchmark S&P 500 index during the same period.

Amazon is slowly becoming an all-encompassing mass that seeks to swallow up everything in its path. Jeff Bezos owns The Washington Post, Amazon's digital assistant is dominating the market, and it bought Whole Foods previous year. He's long predicted that Apple will release its own TV at some point and has pushed rumors that the company will produce its own vehicle, both of which have yet to come to fruition. It has the advantage in the online space and innovative initiatives, but Walmart has begun making startup acquisitions and exploring cashier-free stores just like Amazon. Amazon has spent campaign dollars targeting the demographic through promotions around Prime along with loading Prime Video with kid-friendly content over the past several years. Typical of a retail company, Target has invested heavily on land, buildings and fixtures. "However, for any acquisition to work, Target needs to bring something to Amazon that Amazon can not achieve itself".

Munster explained that Amazon would have no problem funding the deal.

"Investors would view this as Amazon taking over the world and that's a good thing". Amazon Fresh Pickup is an ideal complimentary service that they could integrate into Target stores easily. Last month, CFRA bank analyst Ken Leon wrote that he foresees the Internet company buying a small- or mid-sized bank in 2018.

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