The holiday season is coming into view and Tigress’ 5-star analyst Ivan Feinseth thinks there is one company that will brush aside recent issues and make hay from the attendant shopping extravaganza.
“Even though Amazon (AMZN) recently reported slightly weaker than expected Q3 results and highlighted the need to invest significantly to overcome near-term supply chain and fulfillment issues, it is well-positioned to benefit from broad demand in what is expected to be a record 2021 holiday season,” Feinseth said.
While Amazon has shown it is not immune to the “pandemic-driven fulfillment issues,” Feinseth notes that since Covid-19’s onset, the size of its fulfillment network has doubled, and the company is currently seeking to add an extra 250,000 employees to the workforce ahead of the holiday season in anticipation of “strong demand.”
There will also be new products on offer.At its fall product event, Amazon introduced a number of new connected devices. These included a new home robot called Astro, a smart thermostat, the Echo Show 15 (practically a wall mounted smart TV), a new video calling device for children called the Amazon Glow and an updated Halo fitness tracker, amongst others.
“The expanded line of connected devices continues to highlight Amazon’s innovative ability and ongoing in-home integration with increased connectivity to current and future Amazon products,” says Feinseth.
Of course, there’s also the continued success of AWS, which offered a “bright spot” during last quarter’s relatively soft performance, and which continues to see “solid revenue growth driven by ongoing new customer wins.” Not to mention, there’s also growing enterprise adoption of its “powerful, technologically advanced” Cloud platform.
What’s more, the upcoming launch of Amazon department stores signals Amazon’s brick-and-mortar expansion. The stores will boast a “high-tech dressing room process using touchscreens and enabling access to more than 100 private-label offerings.”
Finally, over the next 12 months, the company is expected to rake in $148.92 billion in Economic Operating Cash Flow (EBITDAR). This will allow Amazon to escalate its investments in technological infrastructure in addition to fund growth, add “complementary” acquisitions and “enhance” its e-commerce brick-and-mortar retail and fulfillment capabilities.
Based on all the above, Feinseth rates Amazon a Buy, and raised the price target from $4,370 to $4,460. The implication for investors? Potential upside of ~26%. (To watch Feinseth’s track record, click here)
No one on the Street is currently betting against Amazon; with a full house of 30 Buys, the stock naturally boasts a Strong Buy consensus rating. The analysts expect shares to rise ~16% over the next 12 months, considering the average price target stands at $4,088.17. (See Amazon stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
