Amazon shares ended the US Wednesday trading session in the green, as analysts from JP Morgan and Piper Jaffray raise their price target for the stock, even higher. Ad and sales growth potential support their positive outlook.
Amazon shares closed 0.13% higher in the US Wednesday, to reach $1254.33. Both new price targets reflect around a further 10%-12% upside for the current Amazon stock price.
Amazon could capture bigger advertising market share
JP Morgan analyst Doug Anmuth re-iteratated his overweight rating of the Amazon stock Wednesday and raised his price target to $1,385 per share, from $1,375. That’s an around 11% premium on the stock’s current level.
Anmuth gives two reasons for his positive outlook on the tech giant:
- The ecommerce and cloud industries are still expanding and the tech giant is well-placed in both, meaning it should benefit from further user uptake and spend.
- Amazon currently has around 10% of the US ad market share and could experience growth of up to 60% in this area in 2018.
"We believe Amazon has the potential to be a $1 trillion-dollar company over time, as it remains early in the eCommerce & cloud secular shifts and in our view Amazon is investing in more major growth opportunities than any other company we cover," JP Morgan analyst Anmuth wrote in a research note.
Placed to capture more online retail spending
The JP Morgan price target increase follows hot on the heels of one from Piper Jaffray analyst, Michael Olson.
In a research note Tuesday, Olson raised his Amazon price target by $200 to $1,400 per share, citing the opportunity to grow its sales among domestic buyers.
“Amazon, despite its size and continued strong growth, is arguably still in the early innings of its share gain potential, even in the company's most penetrated market," Olson wrote in his research note.
Olson estimates Amazon sales could grow by some 28% during 2018.
"Most domestic internet users have a significant opportunity to increase their Amazon holiday wallet share allocation," Olson said.