Analyst Sets Amazon 5-Year Price Target At $1,800

Amazon.com, Inc. AMZN's status as being both the "king of bricks AND clicks" earned the company additional support from Wall Street. D.A. Davidson's Tom Forte initiates coverage of Amazon's stock with a Buy rating and a 12–18-month $1,300 price target and a five-year out price target of $1,800.

Now that Amazon officially operates a physical retail presence through the acquisition of grocery chain Whole Foods, it is well positioned to gain even more market share from the entire retail sector, Forte argued in his initiation note. The expansion into physical retail was necessary to continue disrupting the sector even more.

Amazon's new physical retail space when combined with its market-leading cloud unit called Amazon Web Services will help the company "sustain its profitable revenue growth" for the foreseeable future, the analyst added.

In fact, Amazon's M&A plans are expected to continue as the company is eyeing potential acquisitions of other grocery categories as well as apparel retailers and gas stations, the analyst suggested.

Finally, the secret behind Amazon's success is that it is able to empower other businesses to leverage its advancements in artificial intelligence and machine learning through AWS to "further separate its efforts from legacy retailers."

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