Five-star JP Morgan analyst Doug Anmuth (Track Record & Ratings) picks e-commerce giant Amazon as one of his best ideas for 2019. He calls the valuation ‘compelling’ and predicts a revenue re-acceleration in Q1 2019.
That’s with Amazon Web Services and advertising driving 80 basis points of operating margin expansion to 6 percent this year. As a result, Anmuth reiterated his buy rating and $2,100 price target on January 9.
Even though AMZN is already one of the world’s largest retailers, with one of the world’s largest software businesses, its potential for growth is still significant.
“Amazon is massive, but small in context of the commercial opportunity the company is pursuing” says top-rated Pivotal Research analyst Brian Wieser (Track Record & Ratings). He has just initiated coverage of the stock on January 7 with a buy rating and $1,920 price target.
“With a focus on selling as many consumer goods as possible and much success in attempting to do so, we see Amazon’s retail activities as a play on global consumer spending” the analyst explained.
He points to a recent Euromonitor estimate of global consumer spending as equaling $45 trillion in 2018- and believes this is the figure investors should be looking at. “Given Amazon’s ambitions and its demonstrated abilities, we think this is a reasonable TAM (total addressable market) to consider.”
From this Wieser calculates that AMZN is currently only covering an approximate 1 percent share of its TAM potential.
In total, AMZN scores an extremely impressive 34 buy ratings from top analysts over the last three months vs only 2 hold ratings. The $2,140 average price target suggests shares can surge 34 percent from current levels.