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Amazon.com, Inc. (AMZN) Gets a Price Target Lift from Top Analyst Impressed with Signs of Holiday Gains in 4Q

Baird's Colin Sebastian likes what he sees in the strength of holiday sales from his quarterly selection survey, which points to a killer finish to online holiday spending for Amazon in the fourth quarter.


Amazon.com, Inc. (NASDAQ:AMZN) seems to have had a standout holiday season in sales by the looks of one of the best performing analysts on Wall Street, a bull who is out more confident than ever on this e-commerce giant’s prospects.

Top analyst Colin Sebastian at Baird after conducting proprietary analysis of the company’s fourth quarter product selection believes holiday sales will bode well for Amazon, prompting him to maintain an Outperform rating on the stock while bumping up the price target from $1,100 to $1,310, which implies a 5% upside from current levels.

This marks a shining “finish to online holiday spending” for the giant as far as Sebastian sees Amazon’s performance, who notes that coupled with “key pockets of e-commerce growth (e.g., Cyber week)” beating out his expectations, what matters most is that “a strong finish to the season [will] likely offset the mid-December lull that we previously highlighted from our checks.” The analyst asserts: “We view the solid finish as positive for Amazon, given the platform’s superior fulfillment/delivery capabilities.”

Overall, “Our proprietary analysis of Amazon.com Q4 product selection seems to suggest stronger holiday sales (i.e., bigger dip in product availability in early January), which combined with positive e-commerce data towards the end of December, provides some added confidence in our above-consensus Q4 revenue estimate. While our initial 2019/20 profit targets are below consensus expectations, these estimates reflect significant platform investments in Retail/Voice, Cloud, Media, Transportation/Logistics that could generate out-sized top-line growth,” Sebastian surmises.

Looking ahead to 2019, the analyst estimates Amazon’s revenue will hit $277 billion, more confident than the Street’s roughly $275 billion, but angles for $8 billion in an operating profit forecast, which denotes a 2.9% margin, falling under the Street.

Colin Sebastian has a very good TipRanks score with a 79% success rate and a high ranking of #12 out of 4,755 analysts. Sebastian garners 26.8% in his yearly returns. When recommending AMZN, Sebastian yields 40.6% in average profits on the stock.

TipRanks indicates most on the Street are betting on this e-commerce darling, with 32 out of 33 analysts bullish on Amazon stock when polled over the last 3 months, and just 1 left on the sidelines. With a return potential of 6%, the stock’s consensus target price stands at $1,331.90.