The recent success of e-commerce giant Amazon.com Inc. (NASDAQ:AMZN) speaks for itself, as it has convinced the Street to hold bullish views about its future. The recent addition to these views come from Credit Suisse, as the brokerage has raised its price target to $1050 (up from its previous target of $920) while reckoning web services to be the catalyst for future growth. The key areas that we have identified in the Bellevue-based retailer are its strength in its core, diversification, and strong financial management.
Amazon Web Services would be crucial to the company’s long-run success, as they offer healthy operating margins for the company, Credit Suisse analyst Stephen Ju added. He continued by adding that this segment shall account for over 40% of the free cash flow, in the next five years. Mr. Stephen further added that the segment is now worth over $200 billion. Considering the fact that Amazon itself is a $387 billion brand, the importance of its online services division is quite high.
The brokerage also expects significant improvements in the operations of the firm, as the cash flows are expected to increase significantly as per the sell-side firm’s model. One of the very interesting things about the company is its ability to respond to competitors. The company’s response to Wal-Mart Stores Inc. is a very good example of how it tackles any potential threat.
The Street has confirmed to its bullish views lately, as some brokerages are now adamant to four-digit price-targets. The consensus PT now stands at $896.5, which reckons over 8% upside from the current levels. Investors have lately been taking profits, as stock prices have plummeted. Let’s see if the stock regains after today’s update.