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In January, the venture capital firm Loup Ventures predicted Amazon would acquire Target in 2018, a forecast that hasn't come to fruition — at least not with three weeks left in the year.

But the firm just doubled down on its forecast in a new note about Amazon.

"We continue to believe the combination makes sense," managing partner Andrew Murphy wrote, pointing specifically to the physical retail presence Target could provide Amazon.

Such a deal would also prove competitive to Walmart, which currently has more than 5,000 locations in the US.

On the first day of 2018, widely followed analyst Gene Munster of the venture capital firm Loup Ventures predicted Amazon would buy Target this year, a forecast that has yet to pan out with 22 days left.

The firm just doubled down on that prediction, however, writing in a new note that the deal still makes sense.

"Our prediction that Amazon would acquire Target in 2018 was wrong," Andrew Murphy, managing partner at Loup Ventures, wrote at the end of a post published late Thursday looking at Amazon and Walmart.

"We continue to believe the combination makes sense, however, because Amazon needs to acquire Target-like footprints (1,800 stores) in order to continue its growing retail presence."

Though the timing of the deal is difficult to pinpoint, it would appear an acquisition could get done between now and 2021, Munster told Business Insider in an interview on Friday.

Such a deal would pose a threat to Walmart, which has more than 5,000 stores in the US (the vast majority of which are Walmart Supercenters). Munster said Amazon acquiring Target would "accelerate an existing threat" to Walmart.

A Target acquisition would allow Amazon to compete more effectively in product design and merchandising, areas Murphy believes it lacks. It would bolster Amazon's foray into brick-and-mortar, he said, with in-store elements like curation and experience. Amazon acquired Whole Foods for $13.7 billion in 2017.

"Amazon isn’t great at product design (cf. Amazon Fire Phone, and even amazon.com or the Echo lineup), and retail stores are products," he wrote, pointing to an unsavory review of Amazon's four-star store in The New York Times.

The firm has reiterated its stance on the deal's possibility before; Munster said in late June that he was sticking with his prediction.

"Getting the timing correct is difficult, and every business day that passes it becomes 0.38% less likely that our prediction comes to fruition," he wrote. "That said, we remain adamant that this combination makes sense."

Specifically, he noted that the two retail powerhouses are pursuing similar demographics, and he believes Amazon still needs to capture physical retail space. The company, based in Seattle, is considering opening as many as 3,000 cashierless stores across the country by 2021, Bloomberg reported in September.

Still, Munster said such a push would be "microscopic compared to what they need to do to be a global leader in commerce more broadly."

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