They cited the Seattle company’s growth prospects and its profitability.
“We calculate that AMZN is worth between $4,500 and $5,000 a share long term,” the analysts wrote in a commentary.
That would be $5,000 a share “based on AMZN's track record of [total-addressable-market]-expanding decisions that elongate its growth runway, drive higher profitability, and lower" risk for shareholders by diversifying its revenue stream, the analysts said.
The long-term valuation would be $4,500 a share “based on services now at 43% of sales at a 19% operating contribution, dwarfing profits from e-commerce,” the commentary stated.
Amazon’s media assets are valued at about $500 billion, “nearly as valuable as” Amazon’s Web Services, which includes its cloud platform.
And the company has a long-term valuation of $4,500 a share “based on ecosystem value, as adding groceries, video, Twitch, music, etc. to the Prime service keeps subscribers in AMZN's ecosystem three extra years and grows [customer lifetime value] by 50%."
Morningstar analyst R.J. Hottovy likes Amazon, too. “The company continues to find ways to evolve its business model,” he wrote in a commentary.
“Its operational efficiency, network effect, and a brand intangible asset give its marketplaces sustainable competitive advantages that few, if any, traditional retailers can match.”
Amazon shares recently traded at $2,644.15, up 1.1%. The stock has jumped 55% over the past three months, compared with 29% for the S&P 500.
The $3,200 price target indicates 22% potential upside from Tuesday's closing price.