If you think Amazon.com's (AMZN) - Get Report move to snatch up Whole Foods was just about lowered prices you may want to reconsider. 

Credit Suisse on Wednesday hiked their price target on shares of Amazon to $1,350 from $1,100, predicated on the e-commerce giant's ability to leverage its Whole Foods acquisition to boost both its fulfillment and delivery capabilities through its Prime Now service.

The firm reiterated its "Outperform" rating on Amazon's stock, and the increased price target represents nearly 40% upside from Tuesday's close.

Prime Now offers free two-hour delivery on household items and essentials along with a bevy of other products available on Amazon's platform. The power in Amazon's $13.7 billion purchase of the health grocer is not that it slashed prices, its that it can now efficiently offer same-day delivery service in more areas.

Amazon's deal to acquire Whole Foods allows it to extend the market share of its Prime Now services as their acquisition increased their reach via Whole Food's existing footprint.

"As we cross-reference [Whole Food's] existing store footprint (by zip code) in the US with Prime Now delivery zones, we find that there is only a 50% overlap. This leads us to conclude that Amazon can over the medium term expand Prime Now's presence by up to 50% into those cities where the population density matches existing regions," Credit Suisse noted. Prime Now is currently only available in the zip codes of 198 Whole Foods stores out of 393 total stores.

But, the expansion also allows Amazon to cut down on delivery expenses, resulting in "ongoing margin benefit due to shipping loss moderation," Credit Suisse stated.

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