Amazon May Get Into Gasoline Retailing, Top Equity Analyst Says
Amazon May Get Into Gasoline Retailing, Top Equity Analyst Says
Amazon, known as the great disruptor, may be on the verge of getting into the
retail gasoline business and travel, according to client notes published by a
top Wall Street analyst today.
D.A. Davidson equity analyst Tom Forte suggested that logical industries for
the mega-retailer might be gas stations and travel. While gasoline real estate
has been hot in the last two years, Amazon could take out existing chains
without denting its balance sheet and market fuel in the manner of a Costco to
its loyal customer base.
Although OPIS has yet to see the specific analysis, we are told that the two
industries -- gasoline stations and travel -- stand out as opportunities that
reflect markets of greater than $1 trillion. Eight other industries of over $1
trillion are on the retailer's expansion list, Forte wrote to clients.
He added that Amazon prefers opportunities that can generate significant free
cash flow. Forte noted that Costco generates more than 10% of its sales through
fuel, and OPIS has long observed that the frequency of visits inside Costco
warehouses tend to pop because of the magic associated with cheaper fuel
prices.
Amazon currently has a market capitalization of nearly $910 billion, or several
times the worth of several multinational oil companies.
--Tom Kloza, tkloza@opisnet.com
Copyright, Oil Price Information Service
retail gasoline business and travel, according to client notes published by a
top Wall Street analyst today.
D.A. Davidson equity analyst Tom Forte suggested that logical industries for
the mega-retailer might be gas stations and travel. While gasoline real estate
has been hot in the last two years, Amazon could take out existing chains
without denting its balance sheet and market fuel in the manner of a Costco to
its loyal customer base.
Although OPIS has yet to see the specific analysis, we are told that the two
industries -- gasoline stations and travel -- stand out as opportunities that
reflect markets of greater than $1 trillion. Eight other industries of over $1
trillion are on the retailer's expansion list, Forte wrote to clients.
He added that Amazon prefers opportunities that can generate significant free
cash flow. Forte noted that Costco generates more than 10% of its sales through
fuel, and OPIS has long observed that the frequency of visits inside Costco
warehouses tend to pop because of the magic associated with cheaper fuel
prices.
Amazon currently has a market capitalization of nearly $910 billion, or several
times the worth of several multinational oil companies.
--Tom Kloza, tkloza@opisnet.com
Copyright, Oil Price Information Service
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