JEFFERIES: Amazon is adding 1 million square feet of warehouse space a week — and not slowing down anytime soon (AMZN)

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Amazon is growing, adding 1 million square feet of warehouse space a week and that could see it double its current footprint in four to five years, according to a note from Jefferies.

The expansion will help the company reach all 382 metropolitan areas in the US with a population over 50,000, Jefferies Analyst Brent Thill wrote in the note. Thill projects its fulfillment facilities footprint will grow by 36% in the US and 23% internationally, in the next 18 months, Thill said.

Jefferies raised its price target to $1,250, about 24% above its current price of $1008.82.

Amazon is expanding its facilities as it competes with Walmart and other retailers by offering faster turnaround times, such as same day or next day delivery. The extra space should also solidify the company's foothold into the grocery delivery service business, especially with the newly-inked Whole Foods deal. By tapping its pool of Prime members and Whole Foods' customers, which can feed into each other, it could increase the average basket size per customer and cut down on delivery costs, Thill added.

Though Walmart is also leveraging its physical stores and distribution centers to process more online orders, Thill said that Amazon's customer overlap and reach will keep Amazon ahead of the game. "In terms of competition, our expert does not see Walmart or any other brick-and-mortar player meaningfully challenging AMZN," Thill said.

Amazon will report its earnings on Oct. 26. The stock is up 33.71% this year.