Amazon.com (AMZN) Could Help FedEx and UPS, Says Bloomberg Businessweek's Leonard - TheStreet

NEW YORK (TheStreet) -- Amazon.com's (AMZN) - Get Report mission to update its delivery options, including leasing jets and working toward drone delivery, could actually help FedEx (FDX) and UPS (UPS) in the short-term, Bloomberg Businessweek's Devin Leonard said on "Bloomberg Markets" on Wednesday afternoon. 

The e-commerce giant expects to deliver 7 billion items this year, and has a history of overwhelming traditional carriers at peak times, Leonard said. It can't depend on traditional carriers around the world to be able to handle their capacity.

"They're having to take more and more of these packages to themselves," Leonard said. 

Besides benefiting from the added help in package delivery, FedEx and UPS may also be glad to not face so much pressure from Amazon. 

"I don't think Amazon.com is always the easiest customer to have. I mean they're very demanding, and they like those low prices," he noted. 

But at the same time, Amazon.com could turn into these efforts into a separate delivery network business in five to 10 years, which could hurt traditional carriers, Leonard noted.

"They have a history with things like Amazon Web Services. When they have too much capacity or excess capacity, they say lets bring in some customers from outside and building that into a business. That's what people expect to happen here," he said. 

(Amazon.com is held in the Growth Seeker portfolio. See all of its holdings with a free trial here.)

Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.

TheStreet Ratings team rates Amazon as a Buy with a ratings score of B-. COM INC (AMZN) a BUY. This is driven by several positive factors, which the team believes should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks the team covers.

You can view the full analysis from the report here: AMZN

Image placeholder title

AMZN

data by

YCharts