Amazon Could Be A $1,300 Stock Within Three Years
- Shares of Amazon.com, Inc. (NASDAQ: AMZN) gained more than 110 percent throughout 2015.
- Rob Sanderson of MKM Partners initiated coverage of Amazon with a Buy rating and $800 price target.
- Sanderson added the stock could grow into a $1,300 stock over a three to four-year timeframe.
Shares of Amazon more than doubled throughout 2015 and have gained nearly 300 percent over the past five-years. Investors thinking that the stock is set to lose momentum may be mistaken, at least according to Rob Sanderson of MKM Partners.
In a report published Tuesday, Sanderson initiated coverage of Amazon with a Buy rating and $800 price target that will grow into a $1,300 stock within three to four years.
According to Sanderson, Amazon is the "dominant player" within two of the "largest secular growth opportunities" which are: 1) global e-commerce, and 2) cloud computing.
Related Link: Is Amazon Running A Secret Shipping Business With Major Disruptive Potential?
Sanderson explained that Amazon's continued investments in its e-commerce segment "mask the earnings power potential" but the business is "structurally more efficient" and should deliver long-term margins that are better than traditional retails. On the other hand, Amazon's cloud business has "broken out from a margin perspective" given its 1,660 basis points year-over-year gain while the topline growth accelerated 78 percent last quarter.
"We consider Amazon a core holding for growth investors," Sanderson argued.
Bottom line, Amazon's management team "built remarkable trust" among investors and the investment community "clearly believes" in the longer-term opportunity. Looking forward to the long term, the analyst sees Amazon's net profit surging to $20 billion which justifies the longer-term $1,300 price target.
Shares were up more than 1.7 percent at $669.27 on Tuesday morning.
Latest Ratings for AMZN
Date | Firm | Action | From | To |
---|---|---|---|---|
Mar 2022 | Deutsche Bank | Initiates Coverage On | Buy | |
Feb 2022 | Tigress Financial | Maintains | Buy | |
Feb 2022 | Credit Suisse | Maintains | Outperform |
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