Amazon.com, Inc. (NASDAQ:AMZN) could be on the hook for a huge increase in costs if rate hikes from the United States Postal Service come to fruition. That’s the take fro Credit Suisse, which has run the numbers as the tech giant remains on the radar of the commander-in-chief.
CNBC shares the firm’s insight on what a rate hike could mean for Amazon.
President Donald Trump’s recent focus on what the post office charges Amazon for delivery may cost the e-commerce retailer a significant amount of money, according to one Wall Street firm.
Credit Suisse ran the numbers on how much more it will cost Amazon if the United States Postal Service raised its rates by 15 to 20 percent.
Reports emerged a few weeks back that tech giant was on the radar of Trump, and that was followed by the company becoming a topic that the president posted about on Twitter. He’s called out what he sees as a raw deal that the USPS gets in its dealings with Amazon, and he recently signed an executive order to examine the post office’s finance and provide recommendations for improvement.
In a note to clients, analyst Stephen Ju explains that Credit Suisse’s “sensitivity table suggests incremental shipping expenses for 2018 in the range of ~$1b to $1.8b based on the aforementioned range of price hike possibilities under the assumption of the USPS accounting for 40-50% of costs.”
Amazon.com, Inc. shares rose $11.43 (+0.80%) in premarket trading Monday. Year-to-date, AMZN has gained 22.35%, versus a -0.24% rise in the benchmark S&P 500 index during the same period.