Amazon Witnesses Fresh Price Target Hikes Despite Unfavorable Court Ruling

Apr 24, 2020
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As major stock markets in the United States continue to fluctuate amidst rising death tolls from the coronavirus, companies with the bulk of their operations based on digital platforms are witnessing unprecedented levels of demand. A burst in usage of teleconferncing applications due to workplaces shifting digitally made Verizon Communications Inc buy Blue Jeans for $600 million earlier this month – a move that should be influenced by the success of Zoom Video Communications (NASDAQ:ZM) on the open market.

Amazon.com,Inc (NASDAQ:AMZN) has proven to be another winner following the massive shift global populations went through in their lifestyles due to lockdowns resulting from the ongoing pandemic. While other corporations similar to the retailer's size have promised to bear fixed costs through balance sheets, Amazon's been on hiring sprees.

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The momentum that the corporate behemoth is facing through demand of its services has made its way on the open market through gains made in share price. At the close of trading on Thursday, 24th April, NASDAQ:AMZN had gained 42% of its closing value a month back in March. With these details in mind, investment banks far and wide on Wall Street have turned optimistic on the stock.

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When it comes to price targets for Amazon, it's appearing as if Wall Street has factored in prolonged lockdowns from the coronavirus. Amazon's shares, as we've highlighted previously, have made massive gains, which have ensured that the trend for the company's share price only goes up. At this time, the more cautious investor should rightly be worried about natural correction taking place in the market, yet as we'll see, analysts have set price targets that far exceed the stock's price right now.

Postive coverage on the company started early this week, when Wolfe Research set a $2,600 price target on the company. This was followed by Goldman Sachs jumping in the fray, with the bank doubling down and esptimateing that when talking about potential, Amazon had a roughly 22% upside (through a $2,900/share price target) on its share price on 9:53 am Eastern Time today.

This optimism is now echoed through new price targets for NASDAQ:AMZN set by JMP Securities, Stiffel and MKM partners reports SeekingAlpha. The three firms' respective targets have gone up by $200 for the first two and $175 for the third, with the new estimates now sitting at $2,650, $2,600 and $2500 respectively.

The reasons behind this optimism are quite varied, with JMP echoing beliefs that gains made by Amazopn on the stock market will last een when life resumes normally inside North America and all over the globe.

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Optimism is based on belief that company will outperform analyst conensus for the frist half of calandar year 2020

Stiffel believes that the reasons behind the shares' current gains will usher in a new era of consumer behavior – as more folks start to shift their purchasing habbits online, the firm beliees that even if the constraint of a lockdown is removed in the future, buyers whose habits have changed will maintain their current purchasing habits.

Following the commencement of traing today, Amazon's made osses on the open market that might hint nerviousness following the Court of Appeals in Versailles, France denying the company the right to indepdently determine which products are to be shipped during the coronavirus crisis. As per today's ruling, Amazon is restricted to deliver products that serve only a handful of categories.

JMP's $2,650 price target for Amazon might look exteremely optimisitc when looking at the stock's current share price, but it does not lie at the exteme end of Wall Street optimisim. Goldman Sachs sits at the top of this list, with Wedbush coming in at second place through a $2,650 price target.

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For its part, Golman Sachs bases its optimism about Amazon's future on the belief that Amazon will beat analyst estimates for both of its earnings in the previous quarter and projections for the current. Intel Corporation's drop on the market mirrored investor nervousness, as not only did the Santa Clar tech giant's share price drop following a negative miss on analyst consensus on earnings for this quarter, but with it, it dragged other semis incuding NASDAQ:NVDA & NASDAQ:AMD down.

This optimism has also been echoed by Wedbush, and as Amazon's earnings draw near, looks like the company is set to report

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