Barclays Boosts Target On Amazon From $700 To $850

• Amazon.com, Inc. AMZN shares have surged 114 percent year-to-date, climbing from below $287 in January to crossing the $600 mark on October 26.
• Barclays’ Paul Vogel maintained an Overweight rating on the company, while raising the price target from $700 to $850.
• Although Amazon’s shares have appreciated significantly, this has been driven by strong fundamentals, which are expected to remain robust going ahead, Vogel stated.

“As we head into the final month of the year, we continue to see a large consensus around the same themes and stocks – own large cap Internet. While we would love to mix the pot, and go against the grain, sometimes consensus is right,” analyst Paul Vogel said.

Amazon’s shares are up 117 percent year-to-date, while other Internet stocks have also performed well, with Netflix, Inc. NFLX up 157 percent, Alphabet Inc GOOGL up 46 percent and Facebook Inc FB up 35 percent.

While at times, share prices are driven by market dynamics - “a flight to quality or general shift to large cap,” in 2015, the stock performances have been driven by “real and significant improvements in fundamentals,” Vogel mentioned.

Amazon’s revenue growth accelerated throughout the year and the company beat top line expectations in almost every quarter YTD. The analyst noted that what is more important is that revenue growth was driven by margin expansion.

Vogel believes that Amazon’s stick would “continue to work into 2016.” Although these shares are widely owned, most of the Street is bullish and expectations continue to move higher, the company’s fundamentals are likely to remain robust into 2016.

“Given growth rates and trends, we don’t see valuation as that stretched for any of the big three,” Vogel wrote, while adding, “While we won’t opine too much on other sectors, it is interesting to note the relative strength of large cap Internet and the weakness in almost every other sector within TMT [Technology, Media & Telecommunications].