Amazon.com is set to fly 25% higher, analyst says
Amazon.com (NASDAQ: AMZN) is one of the most expensive stocks in the retail space today, but one tipster thinks there is plenty of room to go higher. Thusday, UBS Analyst Eric Sheridan released a report on the stock reiterating his buy recommendation and price target of $ 4,000, about 25% above its current trading level.
In his analysis, Sheridan responded to a major concern that some investors and pundits have recently expressed about the company: what its comparable selling results will look like in the near future.
After all, Amazon’s business surged in 2020, with impressive growth rates for such a mature company. In its final quarter, the e-commerce king saw a 37% year-over-year improvement in revenue, well above projections by the most optimistic analysts. At the same time, its operating profit has almost doubled and its the net result has been multiplied by three.
Acknowledging the challenge posed by this year’s excellent results in terms of the company’s 2021 comps, Sheridan wrote: a return to more normalized levels of growth in ’21 and beyond while pointing to potential [operating income] margin up as the company makes significant investments related to COVID-19. “
The UBS analyst made a few highlights to support the bullish case for Amazon. We must also keep in mind that the (hopefully) soon diminished threat of the coronavirus will stimulate the growth of the economy at large. Given that Amazon is the leading name in e-commerce, it can reasonably be expected that it will be the primary beneficiary of such a rise. In this context, a course of $ 4000 for the company seems quite possible.
Amazon shares did not make the bulls happy Thursday, however. It fell 0.5% on a day when the S&P 500 Index closed down less than 0.1%.
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