stock is still a buy after this year’s robust gains, according to an analyst, who cited the company’s cloud business and retail sales performance.
Seaport Research Partners analyst Aaron Kessler initiated coverage of
(ticker: AMZN) on Tuesday with a Buy rating and a $145 price target, which implies a 15% increase from the stock’s closing price on Monday. This new bullish rating comes two days before the company is scheduled to report third-quarter earnings.
Shares of
were rising 0.8% Tuesday to $127.59. The stock has soared 52% this year.
Kessler’s confidence in Amazon Web Services, the company’s cloud computing platform for businesses, is one reason for his optimistic view on the stock.
“AWS remains the clear cloud infrastructure leader, and we expect growth to reaccelerate,” Kessler wrote in a research note.
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But the company’s cloud platform isn’t the only catalyst. The analyst anticipates steady e-commerce retail growth as the company continues to experience healthy demand across everyday essentials—specifically in categories like beauty, health and personal care. This comes even as consumers’ wallets are pinched from elevated inflation and interest rates. Amazon does, however, continue to see customers trading down and seeking value in their purchases, the analyst added.
Kessler also expects to see advertising strength in 2024 as Prime Video’s plan with advertisements is set to arrive. Subscribers will be able to choose to pay an additional $2.99 a month to keep their service ad-free.
“We estimate Advertising revenues of $45B/$52B in 2023/2024, representing growth of 19%/16%,” Kessler said. “Additionally, Amazon continues to introduce new ad offerings, and we are optimistic on the launch of Prime Video ads in early 2024 which should continue to drive solid advertising momentum.”
Kessler also initiated coverage of
(META),
(PINS),
(UBER),
(GDDY),
(WIX) and
(SQSP) with Buy ratings on Tuesday. He also initiated coverage of
(GOOG),
(ABNB), and
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(DASH), with Neutral ratings.
Write to Angela Palumbo at angela.palumbo@dowjones.com
