Why Does This Top Analyst Make Amazon (AMZN) One of His Best Picks for 2019?
Amazon (AMZN) is clearly the most ubiquitous name in the world of e-commerce, and it has edged its way into physical stores as well. Amazon Web Services (AWS), its market-leading cloud-computing unit, continues to grow wildly and maintain a monstrous advantage in market share over its competitors. One more fascinating bit of the Amazon puzzle is the online advertising business, which is rapidly growing, and could unlock tremendous shareholder value. What more could you want, right?
Top analyst Doug Anmuth at J.P. Morgan agrees. The analyst believes Amazon is well positioned for 2019 and chooses the e-commerce giant as one of his “2019 Best Ideas.” Anmuth reiterates an Overweight rating on the stock with a price target of $2,100, which implies about 30% potential upside from where the stock is currently trading.
According to TipRanks, which measures analysts’ and bloggers’ success rates based on how their calls perform, 5-star analyst Doug Anmuth has a yearly average return of 18.8% and a 66% success rate. Anmuth has a 33.5% average return when recommending AMZN, and is ranked #38 out of 5,141 analysts.
Anmuth explains why he believes the stock will perform well in the upcoming year:
- AMZN’s fastest growing revenue streams are its most profitable & driving margin expansion. We project AWS & Advertising to represent ~17% of AMZN revenue & ~85%+ of its operating profit in 2019
- Core retail trends remain strong with revenue acceleration likely in 1Q19. We believe tough comps, timing & accounting dynamics, & the shift to 3P is dragging on top-line growth in 2H18. We project revenue growth of +22.1% FXN Y/Y in 1Q & +20.6% in FY19 vs. AMZN’s +10.8%-20.8% FXN 4Q18 guide.
- AMZN is well positioned with the most diversified revenue & profit streams among large-cap Internets. We believe this is a critical differentiator as sector growth moderates due to bigger bases & higher penetration levels.
- Numerous large growth opportunities including grocery with Whole Foods, healthcare/pharma with Pillpack, Alexa/Echo, B2B, India, etc.
Those on Wall Street who are focused on Amazon stock are overwhelmingly bullish. Out of 39 analysts, 37 are riding the Amazon bull and just 2 are out on the sidelines. The consensus price target of $2,133.18 shows a potential 30% upside from where the stock is currently trading. (See AMZN’s price targets and analyst ratings on TipRanks)