Markets

Amazon (AMZN) Gets $1,100 Price Target, Poised to Become Trillion-Dollar Company

Amazon ()

Amazon ()_

Amazon ( AMZN ) CEO Jeff Bezos wants to conquer outer space . And now analysts believe AMZN stock, which just secured an $1,100 target, will follow Bezos’ rocket-fueled trajectory on its way to becoming one of the first trillion-dollar companies on the market.

To be sure, Amazon stock — closing Friday at $886.54 — has already been red hot, soaring more than 18% year to date, besting the 5.53% rise in the S&P 500 index. The retail giant’s monster run, including 50% returns over the past year, has catapulted Bezos beyond Warren Buffett to become the world's second-wealthiest person. Only Microsoft ( MSFT ) chairman Bill Gates stands in Bezos’ way from the top spot, trailing Gates by about $10 billion. Already the king of retail, it’s only a matter of time before Bezos raises the scepter of global wealth.

On Friday, while initiat ing coverage on Amazon with a Buy rating, citing sustained momentum in Prime membership and increased revenue growth, Loop Capital slapped the stock with an $1,100 target. Based on Friday’s closing price, the target assumes potential returns of about 25%. Loop Capital was not alone with its bullishness.

Earlier in the week Barclays analyst Ross Sandler, who has a $1,120 price target on Amazon, boasted about the company’s prospects, saying “it's just a question of when, not if,” — referring to when Amazon would become trillion-dollar company. This means Sandler expects Amazon, which had a market cap $423 billion as of Friday’s close, to add 136% more to its total value. This is even though, Amazon’s market cap trails the $578 level of Alphabet ( GOOGL ) and the $753 for Apple ( AAPL ).

"The retail business has a considerable moat, and the Prime flywheel and logistics and automation are just getting going," said Sandler wrote in a note to investors Wednesday. And the retail business stands to get even more powerful, thanks to the company’s deal last week to acquire Dubai-based s ouq.com , one of the largest e-commerce companies in the Middle East. On the news, Stifel analysts raised Amazon’s target to $1,025 from $912, noting — among other things — Amazon’s potential growth in "the emergence of non-retail business lines.”

All told, Bezos’ ability to build the Amazon’s ecosystem, including a recently filed a patent to put a warehouse in the sky, while providing sustainable and predictable revenue growth, has convinced analysts that Amazon is now one the “surest sure bets” on the market. This is despite the shares trading at all-time highs. And with Amazon expected to report another monster quarter later this month, investors should prepare for liftoff.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Richard Saintvilus

After having spent 20 years in the IT industry serving in various roles from system administration to network engineer, Richard Saintvilus became a finance writer, covering the investor's view on the premise that everyone deserves a level playing field. His background as an engineer with strong analytical skills helps him provide actionable insights to investors. Saintvilus is a Warren Buffett disciple who bases his investment decisions on the quality of a company's management, its growth prospects, return on equity and other metrics, including price-to-earnings ratios. He employs conservative strategies to increase capital, while keeping a watchful eye on macro-economic events to mitigate downside risk. Saintvilus' work has been featured on CNBC, Yahoo! Finance, MSN Money, Forbes, Motley Fool and numerous other outlets. You can follow him on Twitter at @Richard_STv.

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