Amazon Stock: Wall Street Experts Can Agree On One Thing
Among mega-cap tech names, Amazon stock (AMZN) is unique in at least one way: not a single sell-side analyst doubts that shares will climb from current levels.
Today, the Amazon Maven reviews Wall Street’s consensus opinion on the e-commerce giant’s shares. From the most bullish to the most bearish perspective, how high do experts believe that AMZN can go in the foreseeable future?
Figure 1: Wall Street sign.
Ratings and target AMZN stock price
The table below summarizes well where Wall Street stands on Amazon stock. Notice that, of the 35 analysts tracked by Stock Rover, 31 consider AMZN a “strong buy”, while four believe the shares to be merely a “buy”. Not a single expert takes the neutral or bearish stance.
The consensus price target on Amazon shares is currently $4,230, representing a whopping 32% upside potential. In general, price targets are set for 12 months in the future, suggesting that Wall Street expects a strong rally in AMZN stock price by this time next year.
Amazon is the only FAAMG stock whose analysts’ price targets are all above the current market price, without exception. In other words, no one on Wall Street believes that AMZN will be trading lower in a year. It is also the only FAAMG stock with consensus price target at least 30% above current levels.
Also, as a fun fact, Amazon shares at the current target price means a market cap of about $2.2 trillion – an inch above Apple stock’s (AAPL) current valuation.
Figure 2: AMZN consensus analyst rating.
From optimistic to most optimistic
The highest price target on Amazon belongs to Susquehanna’s Shyam Patil, issued immediately after Amazon’s first quarter 2021 results: $5,500. The 72% upside, according to the analyst, is justified by the company’s performance that “continues to impress as business trends remain strong and should continue to do so throughout 2021”.
The least enthusiastic bull is Wolfe Research’s Deepak Mathivanan, with a price target of $3,720. When the analyst initiated coverage on Amazon, in late March 2021, he saw 20% upside to investing in the stock, arguing that “Amazon still has the largest white space ahead in both retail and cloud”. Nearly 10 weeks later, the 20% upside has narrowed to about 16%.
Some key bullish arguments
Between the most and least bullish analysts on Wall Street, several others have offered valuable insights on Amazon and perspectives on its stock. Below are some of the most interesting ones:
- One-day advantage: Morgan Stanley believes that Amazon may have a competitive advantage in fast shipping. By using its own logistic network, Amazon increases consumers’ expectations on product delivery, raising the bar for all other e-commerce companies and standing out among the crowd.
- Prime Video’s “foot in the door”: Stifel cites Amazon’s MGM acquisition as a positive for the catalog, which could lead to better engagement with Amazon Prime members and higher retention. Bank of America has even defended that the M&A could justify a $5 increase in Prime membership price. The Amazon Maven also discussed the implications of the deal recently.
- Post-pandemic winner: few seem to believe that Amazon’s outstanding financial results during the stay-at-home days of the pandemic will fall off a cliff in a post-COVID environment. JMP Securities points out that Prime members have been shopping more often with Amazon and across a broader range of categories. Demand for Amazon Web Services’ offerings also seem to be hot amid the reopening of the global economies.
Twitter speaks
Amazon is the only mega-cap tech stock with a consensus gain potential of over 30% from current levels, according to Wall Street analysts: price target of $4,230. Do you agree with the experts on this one? Leave your opinion below and follow @AmazonMaven on Twitter!
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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)
