Amazon buys Target will "accelerate an existing threat" to Walmart, says analyst doubling down on his conversation (AMZN, TGT, WMT)

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• In January, venture capital firm Loup Ventures waited for Amazon to acquire Target in 2018, a forecast – at least not by three weeks again in the year.
• But the company just doubled the forecast in a new note about Amazon.
• "We continue to believe the combination makes sense," said managing partner Andrew Murphy, focusing on physical retailing. Target can give Amazon.
• Such an agreement would also prove to be competitive with Walmart, which currently has more than 5,000 sites in the United States.

On the first day of 201[ads1]8, general analyst Gene Munster of venture capital firm Loup Ventures followed Amazon to buy Target this year, a forecast that has not yet taken place with 22 days left.

The company has just doubled on that prediction, but writes in a new note that the agreement still makes sense.

"Our prerequisite for Amazon to acquire Target in 2018 was incorrect," wrote Andrew Murphy, managing partner at Loup Ventures, at the end of a post published late on Thursday watching Amazon and Walmart.

"We continue to believe the combination makes sense because Amazon needs to get Target-like footprints (1800 stores) to continue its growing retail."

Although the timing of the deal is difficult to find, it appears that an acquisition could be made between now and 2021, Munster Business Insider told an interview on Friday.

Such an agreement would pose a threat to Walmart, which has more than 5,000 stores in the US (most of them are Walmart Supercenters). Munster said that Amazon buys Target would "accelerate an existing threat" to Walmart.

A target purchase will allow Amazon to compete more effectively in product design and merchandising, areas Murphy thinks it's missing. It would strengthen Amazon's decay in bricks, he said, with items in the store like courage and experience. Amazon bought Whole Foods for $ 13.7 billion in 2017.

"Amazon is not good at product design (see Amazon Fire Phone, and even Amazon.com or Echo Series) and the shops is products, "he wrote, pointing to an unfortunate review of Amazon's four-star store in The New York Times.

The company has repeated its position on the opportunity of the agreement before; Munster said at the end of June that he held his prediction.

"Getting the timing right is difficult and every working day passing it becomes 0.38% less likely that our prediction will be fulfilled," he wrote. "It is said that we remain present that this combination makes sense."

In particular, he noted that the two retailers run similar demographics, and he believes that Amazon still needs to capture physical retail. The company, based in Seattle, is considering opening as many as 3,000 cashless stores across the country by 2021, Bloomberg reported in September.

Still, Munster said such pressure would be "microscopic compared to what they must do to be a global leader in trade to a greater extent."

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