On July 12, Amazon.com, Inc. (NASDAQ:AMZN) will launch a 24-hour Prime Day sale – with over 100,000 reductions worldwide, exclusively for its paying subscribers. Piper Jaffray analyst Gene Munster believes Amazon’s Prime Day event in 2016 will outperform Prime Day 2015, supporting a gradual moderation in retail unit growth through Q3’16.
Munster wrote, “Units grew 27% in Q1’16 and our unit growth index (0.95 correlation with reported results) indicates Q2’16 unit growth of 26% – unit growth comps get more difficult in Q3’16 by 400bps, but with added awareness and engagement from Prime Day, we believe Amazon can sustain unit growth of ~24%-25% in Q3’16. We believe this is in line with or slightly ahead of buyside expectations. Importantly, Prime Day 2016 will offer another quarter of Prime adoption surge and promotion of non-retail services (AWS, Amazon Home Services, Amazon Music, Kindle Unlimited, etc.) and key hardware offerings (Echo, Fire TV).
Munster reiterated an Overweight rating on shares of Amazon, with a price target of $800, which implies an upside of 9% from current levels.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Gene Munster has a yearly average return of 16% and a 61% success rate. Munster has a 34.4% average return when recommending AMZN, and is ranked #8 out of 4018 analysts.
Out of the 46 analysts polled by TipRanks, 41 rate Amazon stock a Buy, while 5 rate the stock a Hold. With a return potential of 8%, the stock’s consensus target price stands at $796.90.