Today’s Research Reports on Stocks to Watch: Amazon and Walmart
Shares of both Amazon and Walmart were in the red on Friday. KeyBanc Capital Markets has found that many households have an Amazon Prime membership. Credit Suisse has also calculated that it would cost Amazon as much as $1.8 billion if the U.S. postal service increased their rates. Walmart recently revealed it would be spending $145 million over the next year on California Walmart stores.
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Amazon.com, Inc. shares closed down 1.22% on Friday with about 3.3 million shares traded. A survey by KeyBanc Capital Markets has recently shown that the e-commerce giant has seen an increasing amount of households are signing up for its Amazon Prime membership. KeyBanc, which rates Amazon as "sector weight" has found that nearly 63 percent of households surveyed in the first quarter of 2018 were Amazon Prime members, compared to 57% in the fourth quarter of 2017 and 57% in first quarter of 2017. On a separate point, Credit Suisse recently revealed that if the post office were to increase its rates by 15%-20%, it could push-up Amazon’s costs as much as $1.8 billion a year. Analyst Stephen Ju wrote that their "sensitivity table suggests incremental shipping expenses for 2018 in the range of ~$1b to $1.8b based on the aforementioned range of price hike possibilities under the assumption of the USPS accounting for 40-50% of costs." Ju also wrote, "Instead of spending time debating whether changes to the USPS shipping rates have any merit, we would rather think through relative scenarios and impact to Amazon’s shipping costs."
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Walmart Inc. shares closed down 0.69% on about 7.6 million shares traded on Friday. It was recently revealed that the company is planning to spend $145 million over the span of a year in California. The money will go towards remodeling stores and opening a new super-center, as well as expanding in-store and online services. The Press-Enterprise has reported that three of the 34 stores that will be remodeled are in Los Angeles County while four are in Orange County, and four others are in Inland Empire. The new super-center will be opened in Fresno. Regional vice president for Walmart’s California operations, Todd Siron, remarked, "Walmart has a longstanding commitment to serving the local communities where it operates and the improvements planned for 2018 exemplify our dedication to not only serving our customers but also serving as a community partner." Walmart has a $11 billion capital spending plan for fiscal 2019.
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Our Actionable Research on Amazon.com, Inc. (NASDAQ: AMZN) and Walmart Inc. (NYSE: WMT) can be downloaded free of charge at Research Driven Investing.
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