Why This Analyst Thinks Amazon Can Surpass Walmart As The Largest US Retailer In 2022

Amazon, Inc. AMZN remains poised to see incremental market share in retail, according to an analyst at JPMorgan.

The Amazon Analyst: Doug Anmuth has an Overweight rating and $4,400 price target for Amazon shares.

The Amazon Thesis: After outsized COVID-19-driven growth during the 2020 holiday season, 2021 is expected to have a fairly robust strong holiday season, Anmuth said in a note.

U.S. online holiday sales will likely grow by 14.5% year-over-year, coming off outsized pandemic-driven growth of 32% in 2020 holiday quarter, the analyst said, citing eMarketer.

Amazon is well positioned into the holidays. The company currently has a 40% share of the U.S. ecommerce market and is on track to surpass Walmart, Inc. WMT as the largest U.S. retailer in 2022, according to the analyst.

Amazon has doubled its fulfillment network since the pandemic began and is no longer capacity constrained, the analyst said. Early timing of holiday promotions indicate that the company has a strong inventory position.

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The return to full Prime one-day and increased same-day delivery enhance last-mile execution, Anmuth said. The company has created 125,000 new fulfillment/transportation jobs and hired 150,000 seasonal workers, allaying concerns about labor shortages.

Prime drives the Amazon flywheel & creates a compelling offering.

"This year, we believe unbundling all of the Prime components reveals offerings worth ~$1,000/year," Anmuth said.

The analyst sees the possibility of Amazon increasing Prime pricing in 2022, party offsetting incremental costs of enhanced one-day and same-day shipping.

AMZN Price Action: At press time, Amazon shares were up 0.30% at $3,590.88.