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The Case For Amazon $2K

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The Case For Amazon $2K
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For many investors, the case for Amazon.com, Inc.(NASDAQ: AMZN)'s stock appreciating to $2,000 per share seems like a far-fetched targer, but a major Wall Street firm sees the valuation as a real possibility.

The Analyst

Morgan Stanley's Brian Nowak maintains an Overweight rating on Amazon with a $1,250 price target. 

The Thesis

Nowak laid out the argument for Amazon's stock to be worth around $2,000 per share or roughly $1 trillion last year, and his core  thesis is essentially unchanged. (See the analyst's track record here.) 

The analyst presented the math behind a $2,000-per-share upside for Amazon in November as follows:

  • Core retail business: $600 billion or $815 per share.
  • AWS: $270 billion or $555 per share.
  • Subscription: $69 billion or $141 per share.
  • Other/Advertising: $55 billion or $112 per share.

The analyst revised his sum-of-the-parts valuation in a Friday note: 

  • Core retail business: $402 billion or $815 per share (3P business) plus $191 billion or $388 per share (1P business).
  • AWS: $273 billion or $555 per share.
  • Subscription: $69 billion or $141 per share.
  • Advertising/Other: $55 billion or $112 per share.

Price Action

Shares of Amazon hit a new all-time high of $1,305.45 on Friday and were last seen trading higher by more than 2 percent on the day.

Related Links

The Road To $1 Trillion: Amazon Can Beat Apple

Analysis: Amazon's Potential Still Largely Untapped

Photo courtesy of Amazon. 

Latest Ratings for AMZN

DateFirmActionFromTo
Sep 2018Stifel NicolausMaintainsBuyBuy
Sep 2018JefferiesMaintainsBuyBuy
Sep 2018Wells FargoMaintainsOutperformOutperform

View More Analyst Ratings for AMZN
View the Latest Analyst Ratings

Posted-In: Amazon 1P Amazon 3P Amazon Subscription AWS Brian Nowak Morgan StanleyAnalyst Color Analyst Ratings Best of Benzinga

 

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