Amazon Is A Story Unique Among Its Large-Cap Peers, But Are Wall Street Expectations Too Aggressive?

One of the more hotly debated stocks is Amazon.com, Inc. AMZN.

On one hand, the stock's 28-percent return since the start of 2017 alone implies the bull run has come to an end. But at the same time, some analysts are calling for Amazon's value to more than double from current levels and be valued at $1 trillion.

Oppenheimer: 'Must Own' Stock

Jason Helfstein of Oppenheimer maintains an Outperform rating on Amazon's stock with a price target boosted from $970 to $1,100, while also reiterating his view that the company is a "must own" within the large-cap space.

According to Helfstein, Amazon still holds the leading position in the entire global e-commerce space, but at the same time, the Street's margins estimates are too aggressive. Specifically, Amazon's own guidance is calling for a 217-basis-point decline in margins in the second quarter, but the Street's full-year 2018 margins estimates imply a gain of 122 basis points.

Helfstein further noted 10 areas where Amazon needs to maintain a high level of investments:

• 1. Domestic grocery infrastructure.
  2. Domestic home décor/furniture infrastructure.
  3. Prime in India.
  4. Prime in China.
  5. Prime in Mexico.
  6. Alexa R&D.
  7. Global video content.
  8. Prime Now.
  9. Prime Music.
  10. Adtech business.

Finally, the analyst is expecting Amazon's 2018 margins to expand by 66 basis points, a level that is lower than the Street's but still represents an improvement.

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