Amazon Could Unlock Up To $600B In Stock Value From B2B Initiative

E-commerce giant Amazon.com, Inc. AMZN disclosed its B2B segment reached a $25 billion annual run-rate GMV in March, and the ongoing momentum could unlock $200 billion to $600 billion in stock value, according to BofA Securities.

The Amazon Analyst: Justin Post maintains a Buy rating on Amazon's stock with an unchanged $4,150 price target.

The Amazon Thesis: Amazon Business last reported metrics in September 2018 when it disclosed a $10 billion run-rate, Post wrote in a note. As such, the business has been growing at a 44% compounded annual growth rate and suggests the company has "gotten over many difficult hurdles" in the B2B space.

The research firm is estimating Amazon can grow B2B GMV to $31 billion in 2021 and this would translate to $17 billion in revenue.

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Amazon's total addressable market in the B2B stands at $1.5 trillion in the U.S. and another $2.1 trillion internationally, Post wrote. This would make it a larger market than its core B2C business and implies B2B is a nascent initiative that would notably increase its valuation potential.

"We think B2B has emerged to be a key category, and Amazon appears well-positioned with improving, same-day, fulfillment capabilities and an active, competitive, 3P marketplace," the analyst wrote.

AMZN Price Action: Shares of Amazon were trading higher by 0.84% Monday afternoon at $3,077.59.

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