Will Amazon Add Target to Its Cart in 2018?

Amazon buying Whole Foods is so 2017; this year is all about acquiring Target for the tech heavyweight, according to a new note from a high-profile analyst.

“Seeing the value of the combination is easy,” Gene Munster, Loup Venture co-founder, wrote Monday in a prediction to clients. “Amazon believes the future of retail is a mix of mostly online and some offline. Target is the ideal offline partner for Amazon for two reasons, shared demographic and manageable but comprehensive store count.”

Amazon has been looking to beef up its physical presence as it takes on its retail rivals. Only 3 percent of the Seattle-based juggernaut’s revenue comes from in-person sales, according to a recent L.A. Times report.

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Walmart “dwarfs” Amazon when it comes to physical stores, according to Munster, with about 11,000 more brick-and-mortar outlets across the globe; adding Target would boost Amazon’s store count up to about 2,300.

And the siren song for Amazon to pursue Target? Moms, according to Munster.

Moms are a key part of Target’s demo, and they would seamlessly fits into Amazon’s uh, targeting (no pun intended), of female patriarchs in its own growth strategy. The online retailer has been focused on everything from kid-friendly content on Prime video to bringing Whole Foods into the fold last year.

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Munster also doesn’t see the Trump administration posing any antitrust threat to a potential deal even though the president has been critical of the Washington Post (which is owned by Amazon CEO Jeff Bezos) and even tweeted a suggestion that the U.S. Postal Service charge Amazon more for shipping its goods.

The analyst pegs a 15 percent premium on Target’s current stock price, which would make it a $41 billion deal. Shares of Target jumped more than 3.5 percent on Tuesday morning following the note.

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