Amazon stock price forecast: Wells Fargo sees a 30% upside

on Jun 8, 2023
  • Wells Fargo initiated Inc today with an "overweight" rating.
  • Analyst Gawrelski is bullish on company's regional fulfilment centre model.
  • Amazon stock is already up nearly 45% versus the start of the year 2023.

Follow Invezz on Telegram, Twitter, and Google News for instant updates > Inc (NASDAQ: AMZN) is already up nearly 45% for the year but a Wells Fargo analyst says it’ll unlock a lot more upside in the coming months.

Amazon stock should be worth $159

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On Thursday, Ken Gawrelski assumed coverage of the eCommerce behemoth with an “overweight” rating and announced a $159 price target – up another 30% from here.

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His bullish view on Amazon stock is primarily based on the company’s transition to regional fulfilment centres.

It’s already having a meaningful impact to fulfilment and shipping efficiency. Annualised fuel and labour savings may have already reached $6.5 billion, 30% of 2023 consensus [operating income].

In April, the multinational warned of continued deceleration in cloud revenue as Invezz reported here. Its Q1 financial results, though, were better than expected.

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Amazon will continue to improve margins

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Still, Gawrelski is convinced that Amazon Web Services – the cloud business will materially reaccelerate later this year.

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The Wells Fargo analyst likes Amazon stock also because he expects a smaller footprint in terms of fulfilment centres to help the company return its margins to 2018 levels in a couple of years. His research note reads:

We see North America retail margins improving more quickly than consensus with 2018 margins returning by 2025, implying significant OI upside. We expect AWS bottoming in 3Q.

Remember that the Seattle-headquartered firm could also be a beneficiary of the A.I. mania. It recently launched Amazon Bedrock to expand its footprint in artificial intelligence.

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