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Amazon Stock: Expert Sees 25% Gains As Holiday Season Starts

Tigress Financial’s Ivan Feinseth is highly optimistic about Amazon, as he believes 2021 holiday season sales will hit record levels. Today, the Amazon Maven digs deeper into his bullishness.

After a disappointing Q3 report, Amazon stock  (AMZN) - Get Amazon.com, Inc. Report took a hit due to short-term constraints overweighing the arguably more robust long-term fundamentals of the company. As we move away from tough 2020 comps, JP Morgan’s thesis could come to fruition: investors might be ready to own AMZN as we approach the holiday season.

Tigress Financial’s Ivan Feinseth has added fuel to the bullish fire. The analyst has not only reiterated his buy recommendation, but he has also raised his price target to $4,460 from $4,370 — one of the highest among the 29 Wall Street analysts that cover Amazon stock. Below are the key factors that justify Mr. Feinseth’s optimism.

Figure 1: Amazon's holiday season box.

Figure 1: Amazon's holiday season box.

(Read more from the Amazon Maven: Amazon Stock Is A 2022 Top Pick, Says This Bank)

Logistics: a competitive advantage this season

During the Q3 earnings call, CFO Brian Olsavsky highlighted Amazon’s progress in building and opening new storage facilities. In the US, more than 100 new buildings were brought online in September alone, including fulfillment centers and sort centers at last-mile delivery stations.

After a challenging COVID-19 period, physical space no longer seems to be an issue, which the Amazon’s CFO says will help to make this a “great holiday season for customers”. In Mr. Feinseth’s view, the investment in storage is the very reason why Amazon will succeed to deliver great results in the current quarter. The analyst said:

Even though Amazon recently reported slightly weaker than expected Q3 results and highlighted the need to invest significantly to overcome near-term supply chain and fulfillment issues, it is well-positioned to benefit from broad demand in what is expected to be a record 2021 holiday season.”

Improved product portfolio

Tigress’ analyst also believes that Amazon's new gadgets will help to improve its ecommerce ecosystem. The most recent examples include Amazon’s smart thermostat Astro; the new Echo Show 15; the Amazon Glow; and the last update of Halo fitness tracker.

The expanded line of connected devices continues to highlight Amazon’s innovative ability and ongoing in-home integration with increased connectivity to current and future Amazon products.

AWS and new department stores

Mr. Feinseth is not bullish only about the e-commerce segment. Amazon has been making great strides in its brick-and-mortar business too. The analyst expects the Seattle giant’s sales to increase as customers turn back to pre-pandemic shopping habits in 2022.

Finally, there’s AWS, whose track record has not failed to impress. In Q3, the cloud computing segment surprised analysts with top-line growth and hefty margins, which helped to offset deterioration in e-commerce.

As the Amazon Maven has previously discussed, the cloud computing and infrastructure space is projected to grow exponentially for the next years. Not unlike us, Tigress seems to think that market leader AWS will be one of the key beneficiaries.

Is the price right?

Looking at a company’s business fundamentals is only half the work needed to find a good stock. How much one pays to own the shares is a key factor in the success of any investment. This is why valuation analysis is so important.

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(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting The Amazon Maven)