Amazon Shares Pass $3,000 And The Stock Has More Room To Run

Although Amazon.com, Inc’s AMZN stock has gained 63% year to date versus the S&P’s 3% decline, prospects of the company are still not completely priced in, according to Baird.

The Amazon Analyst: Colin Sebastian maintained an Outperform rating for Amazon, while raising the price target from $2,750 to $3,300.

The Amazon Thesis: E-commerce checks through June and positive Amazon-specific data suggest stronger prospects for the company’s core Online Retail, Advertising and AWS revenues, Sebastian said in the note.

He emphasized that strong online spending trends continued, even with local stores reopening in many regions, reflecting “the sticky nature of online shopping” as a rising portion of consumer spend shifted to e-commerce for various product categories.

The analyst raised the second-quarter revenue estimate to $85.2 billion, representing 34% year-on-year growth and significantly ahead of the consensus of $80.8 billion. He projected revenue growth of 40% for online stores, 40% for advertising and 33% for AWS.

Amazon seems to have stabilized its logistics operations and gained share in multiple "essentials" product categories, Sebastian said. He added that third parties also seemed largely back on track.

The analyst wrote that the stock does not fully reflect margin benefits of cheaper new user acquisition and the sustainability of accelerating growth in the back half of this year and beyond.

AMZN Price Action: Shares of Amazon were trading largely flat at $3,049 at the time of publication Tuesday. The stock hit $3,000 per share for the first time ever on Monday.