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Jeff Bezos, founder and chief executive officer of Amazon.com Inc., listens during an Economic Club of Washington discussion in Washington, D.C., U.S., on Thursday, Sept. 13, 2018.
Many Wall Street analysts this week from various industries made note of Amazon disrupting the companies they cover.
CNBC combed through recent research to find stocks that are feeling the Amazon effect in different ways. The list includes names such as Costco, FedEx, XPO and Ulta.
“Costco faces the Amazon wall of worry, yet we believe their sticky membership model creates loyalty which can drive sales and profits higher for years to come… Positive ticket trends, solid digital growth, and additional lift in renewal rate are all reasonable on a 12-18 month outlook,” said Evercore ISI analyst Greg Melich who recently initiated coverage on the stock as outperform.
Earlier this week, FedEx reported earnings per share and revenue below expectations for the third quarter. There had been increasing chatter in the analyst community that Amazon could be emerging as a competitor to the shipping giant. One analyst says that is most certainly investor perception. “While we continue to argue Amazon’s ambitious network build out is entirely to provide for retail distribution, it is hard to argue with a market that has nearly decided Amazon will eventually operate a two-way delivery network to rival FedEx or UPS,” wrote Barclays analyst Brandon Oglenski in his earnings recap note.
In an interview on CNBC’s Mad Money, Jim Cramer asked FedEx CEO Fred Smith why the company brought up Amazon on the earnings conference call at all. Smith said FedEx felt compelled to bring up Amazon on the call after CNBC reported that Amazon could take market share away from the company. “We certainly don’t mean to be defensive, but we do think we need to answer provocative questions when they’re raised, including those brought up by CNBC,” Smith said.
The stock is down 28 percent over the last 6 months.
Earlier this week, Amazon launched, Belei, its first in house skin care line. “It’s a certainty that Amazon is a presence in beauty, but how it develops its range relative to the specialty model is still TBD,” said Jefferies analyst Stephanie Wissink responded in a note to clients. She went on to say, “It’s possible Amazon could garner upwards of 10% share of the core beauty marketplace over time.”
Shares of Ulta are down 1.68% this week.
Last week shipper XPO Logistics disclosed the termination of their COO, Kenny Wagers.“We believe that Mr. Wagers’ termination was driven in part by the loss of $600m of annual Amazon business earlier this year, either directly or indirectly. We don’t know if Amazon pulled its business due to Mr. Wagers’ leaving to join XPO last year, but we believe the customer loss factored into XPO’s decision to part ways with the executive,” Citi analyst Andrew Kaplowitz said in a note.
XPO is down 50 percent over the last 12 months.
Here’s what else the analysts say about the Amazon effect:
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