USPS fees to cost Amazon more than $1 billion in 2019 credit suisse

Finance


“Starting in the second half of 2016, Amazon started to report a meaningful increase in capital expenditures primarily for robotics in its U.S., Europe, and Japan-based fulfillment centers,” Ju wrote. “This should over time allow Amazon to demonstrate greater leverage and offset the aforementioned minimum wage hikes.”

Despite the rising costs in the near-term, Ju remains positive on Amazon and its stock overall. The analyst pointed to continued profit margin expansion in Amazon’s e-commerce segment as it grows its infrastructure, better cash flow as a result of improving advertising and upside to Amazon Web Services forecasts.

The analyst reiterates his outperform rating on the company’s stock and bumped his price target to $2,400 from $2,100, implying 36 percent upside over the next 12 months from Friday’s close.

President Donald Trump, a frequent Amazon critic, has often taken to Twitter in the past year to blast what he deemed unfair practices at the e-commerce giant and its use of the Postal Service.

For instance, the president reinforced his assessment that Amazon’s business is costing taxpayers “many billions of dollars” through subsidized rates at the United States Post Office.

“I am right about Amazon costing the United States Post Office massive amounts of money for being their Delivery Boy,” Trump tweeted in April. “Amazon should pay these costs (plus) and not have them bourne [sic] by the American Taxpayer.”





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