President Trump has fired off a series of tweets accusing Amazon (NASDAQ:AMZN) of dodging taxes, bilking the U.S. Postal Service, and undermining Main Street retailers. The assault, which wasn’t Trump’s first on the retail giant, sent Amazon’s stock tumbling nearly 3.5% on Monday.
However, Aegis’ top analyst Victor Anthony believes that strong fundamentals should offset rising U.S. political risks. As such the analyst reiterates a Buy rating on AMZN, with a price target of $1709, which represents a potential upside of 21% from where the stock is currently trading.
Anthony opined, “Investors should get used to President Trump’s Tweets against Amazon for the duration of his tenure in office and accept that there is now political risks for the stock tied to potential legislation that would impact sales taxes for 3P sellers, potentially raise USPS shipping rates for Amazon, force a continual debate on whether Amazon is anti-competitive or is a monopoly, and potentially shift federal government cloud contracts with Amazon to competitors. We offer our view on these topics in this note. Given Amazon’s solid positioning across retail, advertising, and AWS, we believe moves by the President and his administration on any of the above could create nearterm volatility for the stock, but is unlikely to put a dent in Amazon’s longer-term operating fundamentals or market position. While the stock will do what it does in the near-term in response to President Trump’s Tweets, particularly in a risk-off environment for Tech stocks, and FAANGs in particular, we remain firmly in the bull camp on Amazon and would build further positions in the stock during these periods of market volatility.”
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, 5-star analyst Victor Anthony has a yearly average return of 16.3% and a 67% success rate. Anthony has a 38.8% average return when recommending AMZN, and is ranked #77 out of 4758 analysts.