Morgan Stanley analyst Brian Nowak said the firm’s base model shows that every 2% increase in U.S. adoption of Buy with Prime could add about $1B of annual EBIT and in a bull case with scale efficiencies and more volumes this could be a $3.5B-plus EBIT business. Competitive dynamics matter, said the firm, which notes that sellers will have the choice between using Buy with Prime, Shopify (SHOP) Fulfillment or coordinating their own shipping through UPS (UPS), FedEx (FDX) or otherwise, but Buy with Prime shipping is priced competitively against peers while also offering the fastest delivery, the firm added. Morgan Stanley has an Overweight rating and $140 price target on Amazon (AMZN) shares.
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