Normally, when the Federal Trade Commission (FTC) in the United States takes aim at your company, it’s a disaster waiting to happen. For Amazon (NASDAQ:AMZN) and its investors, it’s just another Wednesday. In fact, Amazon closed up fractionally despite this latest legal trouble, which some analysts are considering a simple lack of understanding about how Amazon got to where it is today.
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Robert W. Baird, by way of analyst Colin Sebastian, took a look at the FTC’s case and noted that the case simply “misunderstands” the success of Amazon. Sebastian begins by noting that the current FTC Commissioner, Lina Khan, brought out a paper called “Amazon’s Antitrust Paradox.” In said paper, Sebastian notes, Khan fails to note that Amazon is not just a massive retail operation but rather a series of operations working in a range of markets. Cloud computing, for example, is one of Amazon’s biggest, but it’s also “fiercely competitive.” Then, consider all the rest—grocery, smart devices, streaming and e-commerce, among others—and you get a much more accurate picture of Amazon.
Indeed, it hasn’t all gone Amazon’s way. Its foray into has been somewhat hit-or-miss; recent reports from IGN noted that Amazon’s “Citadel” show may have cost Amazon as much as $250 million. That makes it one of TV’s most expensive shows ever, but it didn’t even make the top 10 of any most-watched streaming list since it rolled out in April.
Most analysts, however, agree with Sebastian. With 37 Buy ratings and one Hold, Amazon is a near-universal Strong Buy. However, it can only offer an 8.21% upside potential thanks to its average price target of $141.09.
