Market Overview

GM And Amazon: Inside What Could Be The First Of Many Deals Between E-Commerce Giant, Automakers

GM And Amazon: Inside What Could Be The First Of Many Deals Between E-Commerce Giant, Automakers
Related AMZN
October's biggest Losers And Most Surprising Winners
Alibaba Buyers Unimpressed By Record Singles Day Sales
Alibaba's Diversification Provides Significant Upside (Seeking Alpha)
Related GM
Would Ford Survive Another Recession? Elon Musk Thinks That's Unlikely
How Teslas Rank In Vehicle Safety
Why Volkswagen's Model 3 'Rival' Is Good For Tesla (Seeking Alpha)

General Motors Company (NYSE: GM) has partnered with, Inc. (NASDAQ: AMZN) to enable package delivery to 7 million connected vehicles.

The Street considers the arrangement not only a “natural fit” but also the first of many between automakers and Amazon.

The Rating

Morgan Stanley analyst Adam Jonas and five others maintained an Overweight rating on GM with a $48 price target.

The Thesis

The analysts see a “vast and lucrative revenue opportunity” for auto companies in the logistics end market. From vehicle storage and micro warehousing to last-mile delivery and edge computing, Amazon collaborations could be numerous.

“We see this as the start of a number of domains where partnership can help solve a problem for Amazon while developing new business models for the OEMs,” Jonas said in a Wednesday note.

With more than 100 million vehicles on the road, GM is considered well-positioned to expedite delivery for Amazon’s 100 million Prime members as well as the clients of other online retailers.

At the same time, Amazon could lean on automakers to diminish shipping and fulfillment expenses, which tallied $46 billion in 2017 and are expected to strike $64 billion this year. In fact, it could eventually do away with last-mile transportation costs altogether.

“With access to the vehicle, once the cars become autonomous, AMZN can have customers send cars to the AMZN DC/stores for package pickups rather than AMZN having to deliver the last mile,” according to Morgan Stanley. 

Price Action

GM stock was down 0.6 percent off the open Wednesday. 

Related Links:

Analysis: US Postal Service, Built To Deliver Letters, Struggles To Compete In Package Delivery

Why Amazon Won't Be Able To Kill FedEx

Photo courtesy of GM. 

Latest Ratings for AMZN

Oct 2018JefferiesMaintainsBuyBuy
Oct 2018Bank of AmericaMaintainsBuyBuy
Oct 2018BarclaysMaintainsOverweightOverweight

View More Analyst Ratings for AMZN
View the Latest Analyst Ratings

Posted-In: Adam Jonas connected vehiclesAnalyst Color Price Target Reiteration Top Stories Analyst Ratings Tech Best of Benzinga


Related Articles (AMZN + GM)

View Comments and Join the Discussion!

Latest Ratings

JBLGoldman SachsUpgrades0.0
JRVRKeefe Bruyette & WoodsDowngrades40.0
ADMPB. Riley FBRDowngrades2.5
EAFVertical GroupDowngrades9.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

7 Biggest Price Target Changes For Wednesday

More Big Companies Beat Projections, But Wall Street Appears To Still Struggle