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D.A. Davidson research analyst Tom Forte argues that an entry into the gas station market would provide a number of benefits for the e-commerce giant. The gas stations would complement Amazon’s ongoing effort to reshape Whole Foods, the grocery chain it acquired for more than $13 billion in 2017.
“We continue to see the potential for Amazon to add gas stations to its physical store portfolio as another means for it to advance its delivery efforts,” Forte wrote in a research note Wednesday.
Aside from a revenue lift from gasoline sales, Forte asserts that gas stations would provide Amazon with thousands of new outposts for its “Prime” delivery service, add a potential new perk for Amazon Prime subscribers and offer a valuable source of consumer shopping data. Additionally, they could serve as a testing ground for the cashier-less technology Amazon is testing at some of its physical store locations.
Amazon did not immediately respond to a request for comment on the research note.
The Wall Street Journal reported earlier this week that Amazon would open more Whole Foods stores to bolster its delivery efforts. At present, the company derives the majority of its retail revenue from its e-commerce platform.
D.A. Davidson reiterated its “Buy” rating for Amazon shares and set a price target of $2,450 for the next 12 to 18 months.