Amazon Buy Rating Is Reiterated at Deutsche Bank

Amazon has 'underperformed its much smaller e-commerce peers' but 'remains one of our favorite' internet names, Deutsche Bank says.
Author:
Updated:
Original:

Amazon  (AMZN) - Get Report shares rose Monday, after Deutsche Bank analyst Lloyd Walmsley reiterated his buy rating and $4,050 price target on the Seattle online retail colossus.

“Although the stock has underperformed its much smaller e-commerce peers in the last 12 months and the last three months, Amazon remains one of our favorite names in the internet space,” he wrote in a commentary.

That’s “not only for the accelerated investments it has made in its operations during the past year, which have made its platform more entrenched, but also for the optionality inherent in several initiatives and given a valuation that looks undemanding relative to its five-year average.”

Amazon recently traded at $3,246, up 1.2%. It climbed 5.6% over the past three months through Friday, compared with 19.8% for the Nasdaq Composite.

“Breaking out the 70%-plus price appreciation over the past 12 months (vs. 14% for the S&P 500), we find a plus 32% change in next-12-month gross-profit estimates and a 30% increase in enterprise value/gross profit,” Walmsley said.

“On the multiple itself, the change is in line with eBay,  (EBAY) - Get Report which has only a limited focus on growth, and materially lower than other e-commerce names.”

Further, “While other e-commerce players have taken some market share during the pandemic, Amazon has also added new Prime members. We see the company gaining share, as shipping times continue to revert to one-day for Prime members.”

Meanwhile Jefferies analysts reiterated Amazon as a top large-cap pick, saying it’s “likely a primary beneficiary of an acceleration in e-commerce growth during” the fourth quarter, Bloomberg reports.

In other Amazon news, two workers at its warehouse in Bessemer, Ala., told Bloomberg that staffers had to attend meetings where managers raised doubts about their unionization drive.

Amazon employees at the warehouse will vote by mail in February and March whether on whether join a union, the National Labor Relations Board ruled two weeks ago.

About 6,000 workers at the facility, 15 miles southwest of Birmingham, will choose whether to join the Retail, Wholesale and Department Store Union.

The election will take place by mail because of the covid pandemic. Ballots will be mailed to staffers Feb. 8 and must be received by the NLRB by March 29.

During the pandemic Amazon workers at several fulfillment centers have complained that safety procedures have been inadequate. Amazon has said it’s ensuring a safe workplace.