Between Amazon.com, Inc.’s (NASDAQ:AMZN) newest book store opening coupled with a first time ever shares have reached $1,000 and Expedia Inc’s (NASDAQ:EXPE) strong catalysts paving way for a momentum-filled 2017, Wall Street’s best-performing analysts are out with votes of assurance for these two consumer players. Let’s take a closer look to see why J.P. Morgan likes Amazon’s strategy to inject old school retail with an innovative evolution forward and why Cantor finds Expedia’s valuation “attractive” amid growth that keeps escalating:
Amazon’s Savvy, Buzzy Bricks-and-Mortar Move
Top analyst Doug Anmuth at J.P. Morgan visited Amazon’s seventh bricks-and-mortar location that kicked off this past Thursday, impressed with “Amazon Books” store as the company continues to strengthen its outreach.
“We visited the store three times over the weekend, and each day we waited in a ~15-45 minute line. The line created a good buzz in the mall, as many patrons passing by inquired about why we were waiting,” commends the analyst, who in reaction reiterates an Overweight rating on shares of AMZN without listing a price target.
The advantage of the book store is not just ignited buzz for the online auction and e-commerce leader, but another way to introduce potential consumers to the Amazon device universe. “While many consumers may come looking for a book, some will likely leave with not only a new book, but also potentially a Prime membership and/or new Amazon device. From the moment we walked in it was clear to us that the Amazon app, Amazon devices, & Prime are critical to the store experience. […] We believe the Prime price differential on books is notable in many cases, and should help attract more Prime subs, albeit on a smaller scale within the bookstores.”
From the analyst’s eyes, it is a smart choice for Amazon to charge the traditional retail experience with new energy, transforming the scene while expanding its own foothold. Overall, Anmuth concludes confident on the company’s fresh, strategic direction, opining, “We believe Amazon is taking a measured approach to its physical store roll-out for now, and we expect its strategy to continue to evolve as it tests book stores, convenience stores (Amazon Go), grocery pick-up locations (AmazonFresh Pickup), & potentially more.”
Doug Anmuth has a very good TipRanks score with a 72% success rate and a high ranking of #46 out of 4,569 analysts. Anmuth garners 20.1% in his yearly returns. When recommending AMZN, Anmuth yields 29.5% in average profits on the stock.
TipRanks analytics indicate AMZN as a Strong Buy. Out of 31 analysts polled by TipRanks in the last 3 months, 28 are bullish on Amazon stock and 3 remain sidelined. With a return potential of 10%, the stock’s consensus target price stands at $1,095.35.
Expedia Right on Track to Deliver Solid Performance for the Year
It looks like this year is going to be good to Expedia, as top analyst Naved Khan at Cantor is positive on the travel giant’s valuation, especially considering a robust HomeAway segment poised for further growth coupled with Trivago’s driving strides forward. On back of his upbeat perspective on the giant’s prospects and anticipating “tailwinds likely to sustain stock momentum through [year-end],” the analyst reiterates an Overweight rating on EXPE with a price target of $178, which represents a just under 24% increase from where the stock is currently trading.
Assessing “Trivago’s momentum likely to continue,” the analyst elaborates on the advantages here, noting, “The growth drivers here include strength in both volume and pricing, with the former driven by Trivago’s focus on heavy branded advertising coupled with spending on variable ad channels. Changes to landing page requirements in 4Q16 are likely to continue to drive strong unit pricing short term and yield improved consumer experience LT, in our view.”
Khan continues to be bullish on Expedia, which “[…] reflect[s] our favorable view of the business’s performance for the rest of 2017 as well as positive intra-quarter checks for 2Q. We believe that Expedia is on track to deliver sustained, healthy top-line growth and improving room night performance for the rest of 2017, driven by a number of catalysts, including: a) strength in HomeAway (driven by transaction growth), 2) continued strong momentum in Trivago, 3) healthy traffic conversion in core OTA, and 4) easing room night comps. […] we view the valuation as compelling and remain constructive on the name.”
According to TipRanks, which measures analysts’ and bloggers’ success rate based on how their calls perform, top five-star analyst is ranked #108 out of 4,569 analysts. Khan has an 85% success rate and realizes 21.8% in his annual returns. When recommending EXPE, Khan gains 18.8% in average profits on the stock.
TipRanks analytics show EXPE as a Buy. Based on 15 analysts polled by TipRanks in the last 3 months, 11 rate a Buy on Expedia stock while 4 remain maintain a Hold. The 12-month average price target stands at $153.15, marking a 6% upside from where the stock is currently trading.