Analysts are bullish on Amazon
Wall Street analysts have been bullish on shares of Amazon based on its investments in cloud computing, and new infrastructure. Analysts have been favorable on Indian e-commerce sector stocks on prospects of growth in consumer spending and rise in Internet penetration in the country. Currently, India (INDA) is Amazon’s highest growth international market and the company is investing heavily in the country. Analysts expect its international expansion plans to yield positive results for the company and they recommend the stock as a buy at current levels.
Analyst estimates tend to drive short-term movements of stocks. Changes in ratings and estimates guide investors towards what markets are expecting from a particular company. In a Bloomberg survey of 48 analysts, 40 (83%) analysts have assigned a “buy” rating on Amazon (AMZN) while 8 (17%) have rated it as “hold”. The stock has received no sell ratings presently. Amazon has a consensus target price of $1082.9 resulting in a one-year upside potential of ~20%.
Recently, analysts at Goldman Sachs, Needham and Wedbush shared their bullish views on the company. Goldman Sachs raised its target price on Amazon to $1100 and expects the company to benefit from its investments in infrastructure. Wedbush analyst raised his target price to $1250 from $900 earlier. He expects Amazon to begin accepting payments through PayPal. Amazon currently has its own way to reach customers without credit via its ‘Amazon Cash’ program, but we expect PayPal’s large customer base to significantly improve Amazon’s reach,” analyst Michael Pachter wrote in a note to investors.
Needham upgraded the stock to buy on growth prospects in the company’s US and international businesses. Needham analyst Kerry Rice mentioned in an investor’s note, “We believe Amazon’s established dominance in U.S. is sustainable with Prime, mobile penetration and third-party growth.” The analyst expects the company’s web services to drive its profits. Further, he forecasts Amazon to increase its market share in the United States to 50% in the next five years and become a market leader.