Amazon Stock Hits Another High On E-Commerce Outlook, Then Reverses



July 14, 2020, 2:14 p.m.

Amazon has several drivers that should bring robust revenue growth and rising profit margins over the next several years, as the pandemic continues to boost online purchasing, a Wall Street analyst said Monday. Amazon stock hit a record high, then reversed .

Cowen analyst John Blackledge pushed his price target on Amazon stock to 3,700, from 2,750 and is among the highest on Wall Street. That's a premium of 12% from where the stock currently trades.

Amazon stock climbed 2.2% in morning trading to a new high. But as markets retreated during the afternoon, Amazon fell 3%, closing at 3,104 on the stock market today.

In a proprietary survey of Amazon users by Cowen, it found that the coronavirus "has driven meaningful increases in consumers' online purchasing habits, likely due to a combination of store closures and personal social distancing efforts, and that dynamic has remained robust over the past few weeks, according to our survey," Blackledge wrote in a note to clients.

That was especially true of users that were part of the Amazon Prime customer rewards program. With Amazon Prime, consumers pay an annual fee and receive numerous perks such as free shipping, music and video content.

About 52% of Amazon Prime customers said they were increasing purchases, vs. 32% among non-Prime households. There are about 69 million Prime subscribers in the U.S.

Blackledge also said Amazon Web Services, the company's cloud computing unit, is showing increasing momentum among enterprise customers due to the pandemic.

Cloud Services Support Amazon Stock Growth

In another analyst report Monday, Mizuho Securities analyst James Lee raised his price target on Amazon stock to 3,450, from 3,100, with a rating of buy. He based that largely on the growth of Amazon Web Services.

"AWS has an established ecosystem to offer a wider choice of database applications, and can enable data migration more economically, implement cloud technologies faster, and organize data more effectively," Lee wrote in a note to clients.

Amazon stock is up 79% this year.

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Verny Joy Author

Verny loves to write poetry, fiction and quotes. Her love for writing landed her in journalism. She loves gadgets and travelling to explore new places.