Most consumers and investors think of Amazon (AMZN +1.61%) as exclusively an online retailer, but its offline operations are looking pretty good these days too.
That's according to one analyst following the stock, who reiterated his bullish take on the company's stock in a recent research note. According to him, it's a buy with a 10% upside in price over the next 12 months or so.
Just Walk Out is on the way out
Bank of America Securities's Justin Post was compelled to publish an update on Amazon following news about its Fresh brick-and-mortar chain of retail stores. In early April, the company confirmed media reports that it is phasing out its Just Walk Out system from its U.S. Fresh stores. This allows shoppers to, yes, walk out of the stores without going through the checkout process; the company's technology scans the items and charges one of the buyer's linked payment methods accordingly.
Just Walk Out is to be replaced in these instances with Dash Carts, technology-enhanced shopping trolleys that allow customers to scan items, and monitor their spending on an in-cart display.
Post wrote that the transition "is part of the broader push to revamp Fresh locations with more customer-friendly features like brighter colors and coffee shops, as opposed to the possibly 'online first' design of Amazon's previous locations."
The analyst is anticipating a "significant grocery investment cycle," from the company. In his view, the Dash Carts will allow it to earn incremental advertising revenue from the displays.
NASDAQ: AMZN
Key Data Points
Not a major operation yet
In his research note, Post reiterated his buy recommendation on Amazon stock, and he reaffirmed his price target at $204 per share. I feel he's right not to modify either, as the Fresh stores probably won't be a significant revenue or cost center for years. There are numerous other reasons to buy Amazon stock, not least the company's mighty Amazon Web Services cloud unit.
