Amazon Gets New Buy Rating, $1,100 Price Target At Loop Capital

Loop Capital’s Blake Harper expects Amazon.com, Inc. AMZN “to continue to be a market-leading online retailer and cloud-based services provider.”

The analyst initiated coverage of the company with a Buy rating and price target of $1,100.

Growth Runway

Harper expects Amazon.com to grow its revenues at a three-year compound annual growth rate of 20 percent through 2019, with adjusted EBITDA of $35 million and margin of 15 percent.

“The company has an effective Prime subscription program to attract and retain members, with the critical goal of increasing consumers' engagement and order frequency by encouraging them to use a widening array of services,” Harper mentioned.

The analyst noted that Amazon.com was aggressively expanding into other markets, such as streaming video with original content, streaming premium music, restaurant and grocery delivery, its own fashion and apparel brands, multiple formats of physical stores, along with “ambitious” geographic expansion.

Setting Competitive Barriers

“We view the company as a giant optimization engine for physical and digital distribution, with an innovation philosophy that should enable it to succeed in multiple new markets,” Harper stated.

The analyst expects Amazon Web Services (AWS) to be spun off in future, with a potential value of more than $200 billion.

“An industry leader in customer service and price, as well as a unique innovation philosophy and culture, Amazon has a substantial competitive moat,” Harper went on to say.

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