Amazon stock: expert sees 25% gains at the start of the holiday season
Amazon stock follows disappointing Q3 report (AMZN) – Get the Amazon.com, Inc. report was hit due to short-term constraints weighing on the company’s arguably more robust long-term fundamentals. As we move away from the difficult 2020 lineups, JP Morgan’s thesis may come to fruition: Investors may be ready to own AMZN as the holiday season approaches.
Ivan Feinseth of Tigress Financial fueled the bullish fire. The analyst not only reiterated his buy recommendation, but he also raised his price target to $ 4,460 from $ 4,370, one of the highest among the 29 Wall Street analysts who hedge stocks of Amazon. Here are the main factors that justify Mr. Feinseth’s optimism.
(Learn more about Amazon Maven: Amazon Stock is a top choice in 2022, according to this bank)
Logistics: a competitive advantage this season
During the third quarter earnings call, CFO Brian Olsavsky highlighted Amazon’s progress in building and opening new storage facilities. In the United States, more than 100 new buildings came online in September alone, including distribution centers and sorting centers at last mile delivery stations.
After a difficult period of COVID-19, physical space no longer appears to be an issue, which Amazon’s CFO says will help make it a “great holiday season for customers.” According to Feinseth, investing in storage is the very reason Amazon will be successful in performing well in the current quarter. The analyst said:
“Even though Amazon recently reported slightly weaker than expected third quarter results and highlighted the need for significant investment to overcome short-term supply chain and fulfillment issues, it is well positioned to benefit from wide demand in what is expected to be a record breaking holiday season in 2021.. “
Enhanced product portfolio
The Tigress analyst also believes that Amazon’s new gadgets will help improve its ecommerce ecosystem. The most recent examples include Amazon’s Astro smart thermostat; the new Echo Show 15; the Amazon Glow; and the latest update to the Halo fitness tracker.
“The expanded line of connected devices continues to highlight Amazon’s capacity for innovation and its continuous home integration with increased connectivity to current and future Amazon products.“
AWS and the new department stores
Mr. Feinseth is not only optimistic about the e-commerce segment. Amazon has also made great strides in its physical activity. The analyst expects the Seattle giant’s sales to increase as customers return to their pre-pandemic shopping habits in 2022.
Finally, there is AWS, whose track record has not failed to impress. In the third quarter, the cloud computing segment surprised analysts with significant revenue growth and margins, which helped offset the deterioration in e-commerce.
As Amazon Maven has mentioned before, the cloud computing and infrastructure space is expected to grow exponentially over the next several years. Much like us, Tigress seems to think that the market leader AWS will be one of the main beneficiaries.
Is the price correct?
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