Amazon.com (AMZN), the power player in the online retailer arena, is apparently operating on all cylinders, as its stock is trading at an all-time high (its third) with no end in sight. The stock was trading up just over 6% to around $489 at 11:00 a.m. ET on Monday.
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And many on the Street are noticing.
Analysts from Cowen and Wedbush both raised their ratings on the Amazon Prime and Amazon Web Services (AWS) provider to outperform on Monday.
“Amazon will displace Macy’s as the #1 U.S. Apparel retailer by '17, in our view, driven by accelerating purchaser growth, Cowen analysts said in a note on Monday.
Cowen reports Amazon’s Apparel & Accessories business is driving its Media, Electronics & General Merchandise (EGM) segment, which comprises ~70% of total company revenue. They are forecasting the U.S. Apparel business will grow from $16 billion Gross Merchandise Value (GMV) in 2015 to $52B GMV in 2020, which implies a gain in U.S. Apparel & Accessories market share from 5% to 14%, thus displacing Macy's.
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Cowen also raised its price target on Amazon to $565 from $435.
Michael Pachter, equity analyst from Wedbush believes Amazon is “well on its way to becoming one of the world’s largest retailers.” He thinks the company enjoys “considerable advantages over its brick-and-mortar competitors,” due to its low direct overhead.
One reason for Pachter’s upgrade from neutral is that he believes Netflix (NFLX) provides a reasonable valuation comparison for Amazon.
He is also bullish on AWS as he’s seeing “faster AWS growth than previously expected at impressive margin, and momentum in the AWS Marketplace segment” overall.
In addition, Pachter said he is seeing greater sales traction and faster growth from Prime Day than expected. He’s also bullish on the increased likelihood that Amazon can add at least $2 billion to revenue from capturing PayPal (PYPL) payments.
Pachter raised his price target forecast on Amazon to $575 from $435.
Meanwhile, a report from The Economic Times reported that Amazon is readying a $5 billion war chest to grow India into its biggest market outside the U.S., according to two people directly familiar with the company's decision. The report also said Amazon is set to add Amazon Prime in India later this year.
Amazon will report 2Q results after the close on Thursday, July 23.