Amazon (NASDAQ: AMZN) Shares Heading to $3,700, According to a Cowen Analyst

Jul 13, 2020
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Amazon (NASDAQ:AMZN) shares have been faithfully traversing an upward trajectory lately, where each incremental elevation seems to provide the footing for the next one. As an illustration of this paradigm, Cowen (NASDAQ:COWN) pegged a new street-high price target for Amazon shares today in its latest investment note.

In anticipation of Amazon’s upcoming Q2 earnings, Cowen analyst John Blackledge raised Amazon’s stock price target from $2,750 to $3,700, constituting a bullish potential of 15.63 percent relative to Friday’s closing price of $3,200. The analyst also maintained an ‘Outperform’ rating for the stock.

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Blackledge expects Amazon to disclose “strong” Q2 2020 earnings, spurred by the growing ubiquity of e-commerce in an era governed by the spatial distancing realities associated with the ongoing coronavirus (COVID-19) pandemic. Moreover, the Cowen analyst also expects further upside for Amazon’s cloud computing and ad businesses.

Amazon is expected to disclose its Q2 2020 earnings on the 25th of July. The consensus revenue estimate is currently pegged at $80.6 billion. Similarly, the consensus EPS expectations currently call for $1.60 in earnings per share. Accordingly, Blackledge expects Amazon to slightly exceed the broad-based revenue estimate. Moreover, “the rolling forward of free cash flow” also contributed to the stock price upgrade.

Bear in mind that it was just a week ago that Amazon crossed the $3,000 mark for the first time ever. Wall Street analysts, on the whole, have been perennially bullish throughout the ongoing pandemic phase. This makes intuitive sense as the recent trends favoring online shopping and delivery are likely to persist even beyond the pandemic due to the added convenience for the consumers. Moreover, subscriptions for the Amazon Web Service are inherently sticky, allowing analysts to continue to expect healthy growth in the company’s top-line metric. During the zenith of the pandemic-induced lockdowns, Amazon was forced to enhance its e-commerce infrastructure to cope with a deluge of orders. Given the persistent need to maintain social distancing, the company is expected to continue to benefit from the growth in this segment.

In order to maintain the attractiveness of its retail platform, Amazon partnered with Mastercard (NYSE:MA) earlier in June to allow its customers in 12 countries – spanning across North America, Latin America, the EU, and the Middle East – the facility of having their credit card credentials tokenized. These tokenized credentials stored by the e-commerce giant will always remain up-to-date. This means that when a consumer acquires a new credit card from a bank, the tokenized credentials will be automatically updated on Amazon’s platform, thereby, eliminating the need for re-entering credentials and facilitating an overall seamless checkout experience. As per the statement, this service is expected to debut on Amazon in 2020.

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