• 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

    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