Gene Munster, the cofounder of Loup Venture and former Piper Jaffray analyst, says that Target would make a good match with Amazon for a few reasons. Among these reasons are the two companies target demographics. Both of them appeal to mothers and families.
Gene Munster also notes that the acquisition would offer Amazon Target’s “manageable but comprehensive store count.” The tech analysts believes that AMZN may pay as much as $41 billion for TGT, which is a 15% premium to its current value.
It’s also unlikely that a deal between Amazon and Target would run into trouble with regulators. Even if a merger was approved, it would still leave the newly-combined company with a smaller market share than rival Wal-Mart Stores Inc (NYSE:WMT), reports Bloomberg.
“As for retail stores, Amazon’s acquisition of Whole Foods 470 stores along with testing of the Amazon Go retail concept is evidence that Amazon see[s] the future of retail as a combination of mostly online and some offline,” Gene Munster said in a statement obtained by CNBC.
The possibility of Target being acquired by AMZN could also be good news for investors of the stock. The company’s performance last year wasn’t all that grand with TGT stock dropping 10% in 2017. In comparison, the online retail company saw its stock increase by 56% last year.
AMZN stock was up 1% and TGT stock was up 3% as of Tuesday morning.
As of this writing, William White did not hold a position in any of the aforementioned securities.