JMP Analyst Pounds the Table on Amazon (AMZN) Stock


The holiday season is fast underway, providing the perfect time to discuss Amazon (AMZN). While the tech titan has seen surging growth in revenue through its Amazon Web Services and advertising, retail remains the company’s bread and butter. JMP analyst Ronald Josey regards Amazon as “the leader in selection, convenience, and price across products and categories,” and reiterates his Outperform rating and $2,050 price target.  (To watch Josey’s track record, click here)

According to Josey, ecommerce holiday shopping growth is accelerating. Compared to last year during the same period, e-commerce shopping between November 1st and Cyber Monday is up 20%; which is faster than growth (17%) during the same period between 2017 and 2016. The analyst points out that not only is e-commerce sales accelerating, but Amazon continues to be the number one destination or shoppers. According to his survey of online shoppers, 73% of respondents started their search on Amazon.

Amazon is also increasingly gaining on mobile. According to Josey, “48% of respondents are using Amazon’s mobile app more than the desktop.” Mobile is a very important medium for internet companies, as people are increasingly spending more time on their phones. Facebook, for example, now generates the (super) majority of its revenue through mobile. As Amazon continues to generate revenue through ads (similar to Facebook), mobile will continue being an important driver for growth.

Another advantage Josey notes is Amazon’s price leadership. “Amazon has consistently maintained price leadership since (survey tracking started) on 11/01, across our 20 goods on Amazon, Walmart, and Target,” adding that “on Cyber Monday we saw the lowest prices since our tracking began.”

Overall, Wall Street is extremely bullish on Amazon. TipRanks tracking of 38 analyst ratings on the company shows a consensus Strong Buy, with 37 analysts recommending Buy and only one recommending Hold. The average price target is $2,152.86, representing a 29% upside from current levels. The most confident analyst goes as high as $2,450. (See Amazon’s price targets and analyst ratings on TipRanks)

 

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