- Analysts led by Mark Mahaney at Evercore ISI reiterated their Outperform rating on Amazon.com Inc (NASDAQ:AMZN) with a target price on the stock of $4,300, implying more than 30% upside.
- Amazon remains the investment bank advisory group's top mega-cap long holding. Mahaney and his team highlight four underappreciated elements of the company.
- Firstly, Amazon's recent investment in its distribution capacity drove greater consumer demand, also known as "shipping elasticity." Mahaney sees the potential for upside to the Street's Amazon Retail Revenue estimates.
- Secondly, the market undervalued Amazon's opportunity in brand advertising free of privacy-related advertising headwinds. Amazon reported $31.2 billion in ad sales in 2021, scoring 32% growth Y/Y, beating Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) YouTube. Merchants can advertise their products in Amazon platform search results. Amazon's new brand advertising initiatives with the NFL and IMDb can benefit ad sales growth.
- Thirdly, Amazon's push into the grocery delivery market for online retail was highly attractive. Its new Amazon Fresh stores and their "walkout" technology "could well be a grocery story game-changer."
- Fourthly, it was just how cheap the shares are, statistically.
- Price Action: AMZN shares traded higher by 0.22% at $3,280.19 on the last check Friday.
