Market Overview

Morgan Stanley Remains Bullish On

Morgan Stanley Remains Bullish On
Related AMZN
How 40-Year Wall Street Veteran Marc Chaikin Came Out Of Retirement To Help You Find Your Next Trading Idea
While Other Companies Ride The Trump Tide, Boeing Scales Back
Target Drops 8% On Another Disappointing Report - An Update For Dividend Investors (Seeking Alpha)

In a recent report, Morgan Stanley analysts took an in-depth look at the e-commerce sector. Despite strong growth in recent years, analysts see even stronger growth coming in the future as convenience becomes more important to consumers than price. The report named, Inc. (NASDAQ: AMZN) as one of Morgan Stanley’s top e-commerce picks.

Scale And Infrastructure Advantages

Analysts believe that free shipping is the most important service to online customers in Amazon’s core markets (U.S., U.K., Germany and Japan). They predict that free shipping will soon be the standard for all online purchases, a service that Amazon already offers to its Prime subscribers.

Amazon has been building a strong global network of distribution centers and storage facilities (at the expense of profits) in recent years, and analysts believe that other online retailers will soon be playing catch-up. They estimate that Amazon’s shipping infrastructure allows for an average shipping cost per unit of about $2.40, whereas United Parcel Service, Inc.'s (NYSE: UPS) average cost per domestic package is about $8.00.

Analysts predict that other online retailers will likely have to absorb the higher cost of shipping through either paid customer loyalty plans or higher product prices.

The Strengths And Weaknesses Of Prime

Analysts note that U.S. Prime membership has led to major increases in sales numbers that will continue to drive higher margins.

However, international customers don’t seem to be subscribing to Prime as willingly as Amazon would like.


Analysts see an attractive setup for Amazon in the near-term. Morgan Stanley has an Overweigh rating on Amazon and a $420 price target for the stock.

Latest Ratings for AMZN

Jan 2017Aegis CapitalInitiates Coverage OnBuy
Nov 2016CitigroupMaintainsBuy
Nov 2016CitigroupMaintainsBuy

View More Analyst Ratings for AMZN
View the Latest Analyst Ratings

Posted-In: Morgan StanleyAnalyst Color Long Ideas Reiteration Analyst Ratings Trading Ideas Best of Benzinga


Related Articles (AMZN + UPS)

View Comments and Join the Discussion!