Amazon Primed for More Gains as Pandemic Boosts Sales, Says Citi

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Amazon.com (AMZN) - Get Report is primed for more gains, say Citi analysts, who on Friday raised their one-year-out expectation for the stock to a Wall Street high of $3,550 from $2,700.

In a note to clients, Citi analyst Jason Bazinet said that he sees more upside for Amazon, driven in part by pandemic buying among consumers ill-inclined to venture out to brick-and-mortar stores but augmented by the e-tailer's platform, selection and ability to get goods from 'A' to 'B' more quickly and efficiently than its competitors.

Indeed, Bazinet agrees with reports that indicate Amazon will account for some 43% of the domestic e-commerce market by 2022, up from 38% in 2019, and nearly 7% of total U.S. retail sales by 2022, up from 4% last year.

The rising market share represents “a powerful, long-term tailwind,” he said, adding that his group is maintaining its buy rating on Amazon stock.

The coronavirus pandemic has produced a decisive fissure between online and brick-and-mortar retailers, particularly in goods and apparel, with the likes of Brooks Brothers, J.Crew, J.C. Penney  (JCP) - Get Report and Neiman Marcus seeking bankruptcy protection even as their online sales continue to generate revenue.

Amazon in particular has emerged a clear winner through Covid-19, with the retail and cloud giant’s stock gaining nearly 90% since the mid-March lows. Along with its rockstar performance, the company has also received other analyst upgrades, including a pair last month from Deutsche Bank and SunTrust. 

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