JEFFERIES: Amazon is adding 1 million square feet of warehouse space a week - and not slowing down anytime soon
David Ryder/Getty
The expansion will help the company reach all 382 metropolitan areas in the US with a population over 50,000, Jefferies Analyst Brent Thill wrote in the note. Thill projects its fulfillment facilities footprint will grow by 36% in the US and 23% internationally, in the next 18 months, Thill said.
Jefferies raised its price target to $1,250, about 24% above its current price of $1008.82.
Amazon is expanding its facilities as it competes with Walmart and other retailers by offering faster turnaround times, such as same day or next day delivery. The extra space should also solidify the company's foothold into the grocery delivery service business, especially with the newly-inked Whole Foods deal. By tapping its pool of Prime members and Whole Foods' customers, which can feed into each other, it could increase the average basket size per customer and cut down on delivery costs, Thill added.
Though Walmart is also leveraging its physical stores and distribution centers to process more online orders, Thill said that Amazon's customer overlap and reach will keep Amazon ahead of the game. "In terms of competition, our expert does not see Walmart or any other brick-and-mortar player meaningfully challenging AMZN," Thill said.
Amazon will report its earnings on Oct. 26. The stock is up 33.71% this year.
To read more about how you may be focusing on the wrong thing in the Amazon-Whole Foods deal, click here.
Markets Insider
- I'm an interior designer. Here are 10 things in your living room you should get rid of.
- Higher-paid employees looking for work are having a tough time, and it could be a sign of a shift in the workplace
- A software engineer shares the résumé he's used since college that got him a $500,000 job at Meta — plus offers at TikTok and LinkedIn
- 7 scenic Indian villages perfect for May escapes
- Paneer snacks you can prepare in 30 minutes
- Markets crash: Investors' wealth erodes by ₹2.25 lakh crore
- Stay healthy and hydrated: 10 immunity-boosting fruit-based lemonades
- Here’s what you can do to recover after eating oily food