Amazon will buy Target in 2018, influential tech analyst Gene Munster predicts

Amazon will buy Target in 2018, influential tech analyst Gene Munster predicts”

Loup Venture co-founder Gene Munster predicts in a report that Amazon is going to acquire Target in 2018. As well as forecasts for more investment in artificial intelligence (AI) led by Alphabet Inc.

"Getting the timing on this is hard, but seeing the value of the combination is easy", Munster wrote. The pair generated about $176 billion in 2017 USA revenue against Wal-Mart's $315 billion, and Target's 2,300 sites would help diminish Wal-Mart's 11,695-store lead.

Could mega-online retailer Amazon be ready to jump headfirst into the brick-and-mortar world?

"Target is the ideal offline partner for Amazon for two reasons, shared demographic and manageable but comprehensive store count", Munster wrote, noting both companies focus on mothers and families.

Moms are a key part of Target's demo, and they would seamlessly fits into Amazon's uh, targeting (no pun intended), of female patriarchs in its own growth strategy.

Amazon purchased up-scale grocery chain Whole Foods in June in a $13.7 billion all-cash deal. The online retailer has been focused on everything from kid-friendly content on Prime video to bringing Whole Foods into the fold previous year. "Amazon believes the future of retail is a mix of mostly online and some offline". He estimated a takeout valuation of $41 billion, or a 15-per-cent premium to Target's current value. In comparison, Walmart has more than 11,600 locations and $315 billion in US sales. The company's performance previous year wasn't all that grand with TGT stock dropping 10% in 2017.

Lastly, Munster wrote, Amazon can afford Target. Antitrust regulators won't have a problem with that.

Predicting Amazon's next deal has become a common theme for analysts.

Target's share price was up 3 percent during Tuesday morning trading, an increase greater than the major market indices.

Amazon traded up about 1% to $1,181.42, in a 52-week range of $747.70 to $1,213.41.

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