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Why This Analyst Bets on Amazon (AMZN) Stock


What would you tell someone if they were to ask you, “Should I buy Amazon (AMZN) right now?” After all, Amazon stock is still well off its highs, even as it hit a market value of $790 billion, beating Apple as the number one most valued stock in the stock market.

For Pivotal analyst Brian Wieser the answer is quite clear —  the analyst sees this stock as a flower that keeps blossoming. Wieser initiates coverage on AMZN with a Buy rating and price target of $1,920, showing a potential upside of 18%. (To watch Weiser’s track record, click here)

The analyst says the company has many streams of revenue that make the company stable. He considers the business’ retail, marketplace and subscription-related sector to be fluid sets of revenue with any of the categories replaceable by any of the others. He also considers the company’s size: “Amazon is one of the world’s largest retailers (with a sideline in fast-growing and high-margin advertising activities) and also owns one of the world’s largest software businesses. Despite its current massive size, we see Amazon’s opportunities as mostly unconstrained based on a successful track record of capitalizing on consumer and IT department spending,” the analyst says.

“With a focus on selling as many consumer goods as possible and much success in attempting to do so, we see Amazon‘s retail activities as a play on global consumer spending, which is much broader than pure retail or today’s e-commerce business. In terms of thinking about the market opportunity, we would point to a recent Euromonitor estimate of global consumer spending as equalling $45 trillion in 2018. Given Amazon’s ambitions and its demonstrated abilities, we think this is a reasonable TAM (total addressable market) to consider […] Acceleration is unlikely (if not implausible) given the difficulty any company would face in sustaining or meaningfully improving upon prior growth which build on Amazon’s already-massive scale,” Wieser concludes.

It seems unbeatable. TipRanks data shows almost every analyst on Wall Street who has reviewed the stock in the last three months considers it a Buy. Out of 40, we have 38 bulls and two who are stuck in the middle. The consensus price target of $2,136.29 shows a potential upside of 31%. (See AMZN’s price targets and analyst ratings on TipRanks)

 

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