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Amazon Will Buy Target in 2018: Gene Munster

12 January 2018

As an example of how the partnership between Amazon and Target could work, Munster pointed to the ecommerce giant's purchase of Whole Foods to show how the combination of online and offline operations can be utilized.

The acquisition of 1,834 Target stores, plus Whole Foods' 470 units, would give Amazon approximately 2,300 brick-and-mortar locations, which Munster considers a "manageable but comprehensive" store count. Amazon already bought Whole Foods, and according to the prediction, it's not done with traditional retailers. Target has been focused on moms, he said, a demographic which is also central to Amazon's approach to expanding its market share.

That's according to one prominent Wall Street analysts, who sees Amazon ponying up a hefty sum to bring Target under its control. Moms, according to Munster. In November, DA Davidson analyst Tom Forte wrote that Lululemon Athletica Inc. may be attractive to the online retailer, while Citigroup analyst Paul Lejuez recently catalogued a host of potential targets, including Abercrombie & Fitch Co., Bed Bath & Beyond Inc. and Advance Auto Parts Inc. The online retailer has been focused on everything from kid-friendly content on Prime video to bringing Whole Foods into the fold past year.

"Amazon will acquire Target", Loup Ventures' Gene Munster wrote Monday in a post on his predictions for 2018.

Assuming a 15-percent premium, he predicted a $41 billion takeover representing a mere 8 percent of Amazon's $564 billion market cap. Target's shares rose by almost 4% on Tuesday, likely in response to these reports.

While the acquisition might make sense, there's no guarantee that Munster's prediction will come true. "The idea of Amazon buying Target just seems so fantastic to me that I doubt it's true", Lee Peterson, executive vice president of brand, strategy and design at global retail design firm WD Partners, told Retail Dive in an email.

The acquisition of Target, if it happens, would follow Amazon's recent $13.7 billion purchase of Whole Foods.

It's shaping up to be a critical year for Target Corporation (NYSE:TGT), as rumors continue to swirl about a possible buyout from Amazon.com (AMZN) later in 2018.

"Investors would view this as Amazon taking over the world and that's a good thing".

The domestic number would dip even further where Amazon is forecasted to hit $105 billion this year and Target is almost the same size at $71 billion.

Amazon Will Buy Target in 2018: Gene Munster