Here’s why Evercore’s Mahaney is still bullish on Amazon stock
- Amazon.com Inc stock is trading sideways since September 2020.
- Mahaney says Bezos factor might be contributing to pressure on AMZN.
- Evercore's expert remains bullish on AMZN with a price target of $4,500.
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Amazon.com Inc (NASDAQ: AMZN) stock is trading sideways since September 2020 between a per-share price of $2,900 and $,3500 (£2,087 and £2,519). The online retail giant’s Prime Day started on Monday morning, leaving investors questioning if the annual high-sales-volume event could help the stock finally break out of the range-bound trading seen in the past nine months.
Mark Mahaney’s comments on CNBC’s “Squawk Box”
Commenting on AMZN, Evercore ISI’s Head of Internet Research Mark Mahaney said on CNBC’s “Squawk Box”:
“Amazon had a dramatic rise in the stock market last year as it was correctly perceived early on as a COVID winner. So, the consolidation phase came after that. There’s also a slightly heightened risk associated with the stock related to the increased regulatory risk and more intense competition from omnichannel retailers like Walmart. Cloud space has also gotten tougher with Azure and Google Cloud both showing a lot of momentum.”
According to Mahaney, the Bezos factor might also be contributing to pressure on Amazon stock. Jeff Bezos is scheduled to officially step down as the CEO of the company. While he will remain the executive chairman of Amazon, investors might be wondering how well is Amazon going to perform after Bezos, says Mahaney.
Mahaney has a price target of $4,500 on AMZN
AMZN, however, remains Mahaney’s top pick in the sector. He has a price target of $4,500 on Amazon stock. The Evercore’s expert further said in his interview with CNBC:
“I think operationally there is not going to be any change at Amazon after Bezos. The real unlock on Amazon’s stock in the next six months is going to be the market shift back to growth, because then the secular growth premium that Amazon has typically benefitted from is going to come back in spades, and Amazon is going to start outperforming. That’s why it’s the number one pick in mega-caps.”
Earlier this month, JPMorgan analysts said Amazon will become the largest U.S. retailer by 2022. In the past fifteen years, Amazon has been consistent with a 20% top-line growth. Considering Amazon’s strength in retail, cloud, and advertising, Mahaney expressed confidence that it will continue to do the same for the next several years.
On a year-to-date basis, Amazon is currently close to 10% up in the stock market. At the time of writing, the American multinational tech giant has a market cap of $1.76 trillion and a price to earnings ratio of 66.46.