RBC Capital Reiterates Outperform Rating & $1100 PT on Amazon.com (AMZN) Following Whole Food (WFM) Acquisition; 'Reasonable Shipping-to-Home Logistics Opportunities Here'
RBC Capital reiterates Outperform rating and $1,100 price target on Amazon.com (NASDAQ: AMZN), as the company announced this morning it was acquiring Whole Foods Market (NASDAQ: WFM) for $42 per share in an all cash transaction, valuing the grocer at nearly $14B, which includes Whole Food’s Net Debt.
Analyst Mark Mahaney notes the deal is expected to close during the second half of the year, as this represents the largest acquisition for Amazon by over 10x. Management in past has identified groceries as one the next major growth drivers for the company, and this deal provides an opportunity for faster ramp in under-penetrated, insufficiently served $3 trillion total addressable market. Furthermore, Whole Foods large store footprint of 450 stores across 48 states could help Amazon integrate shipping-to-home logistics opportunities, according to the analyst.
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Shares of Amazon.com closed at $964.17 yesterday.