Amazon (AMZN) PT Raised to $1000 at RBC Capital
- European stocks hit three-week low as Trump reality sets in
- Qualcomm (QCOM) Calls Apple's (AAPL) Claims 'Baseless'
- Unease over Trump sends dollar to one-and-half month low
- Kate Spade (KATE) Said to Attract Interest from Coach (COH) and Michael Kors (KORS) - Bloomberg
- Oil falls as signs of U.S. output rise overshadow OPEC-led cuts
Get inside Wall Street with StreetInsider Premium. Claim your 2-week free trial here.
RBC Capital analyst Mark Mahaney reiterated an Outperform rating and boosted his price target on Amazon.com (NASDAQ: AMZN) to $1,000.00 (from $840.00) following their 4th Annual Online Consumer Survey covering U.S., Germany & Japan. They also analyze "4th Pillar Potential" of the company's Alexa/Echo Platform.
Mahaney highlighted the following key points:
Update #1: U.S. Consumer Survey Highlights Faster Flywheels: 1)Stretching its Lead– 89% selected Amazon when asked which Online Retail site they use most, modestly widening its lead over #2, eBay. 2)Purchase Frequency Rising, Satisfaction Remains High– 85% stated they are “Extremely” or “Very” satisfied, translating into higher purchase frequency (47% purchase at least 2-3x/mo., +5pts Y/Y). 3)Prime Adoption Step Change– Survey shows U.S. Prime adoption rose 9pts Y/Y, to 49%. In the U.S., Prime subs likely near 60MM and globally as high as 100MM. 4)Prime Members Becoming More Loyal…Flywheel Spinning Faster– 76% (+1pt Y/Y) state they use Amazon more today than when they first joined.
Update #2: Prime Flywheels Spinning Internationally: 1)Amazon Dominant in Germany; Solid in Japan– Amazon ranked #1 with an 85% response rate in Germany, (24pts above #2, eBay). And #2 in Japan with a 62% response rate, 2pts behind Rakuten. 2)Satisfaction, Purchase Frequency Intrinsically High In Germany; Less Robust in Japan– In Germany, >90% are “Extremely” or “Very” satisfied, translating into relatively high purchase frequency (52% purchase at least 2-3x/mo.). In Japan, 37% are “Extremely” or “Very” satisfied, translating into relatively lower purchase frequency (37% purchase at least 2-3x/mo.). 3)Tho Lagging U.S., Germany & Japan Showing Significant Prime Penetration– Survey shows Prime penetration @28% and 19% in Germany and Japan. 4)Germany, Japan Showing Flywheels– 80% and 62% of Prime custs. in Germany and Japan use Amazon more than when first joined Prime.
Update # 3: “Alexa, Are you Amazon’s 4th Pillar?”– On June 2nd, we published our 4th Pillar report (link here), highlighting 6 potential candidates. We’re now introducing a 7th, Alexa, Amazon’s AI-based Voice Assistant platform. Our survey indicates rising awareness and device ownership among Amazon customers (33% aware; 6% ownership– implying 7MM total Alexa devices sold). And 3rd party apps/skills has tripled since June to 3,000. Alexa may also be stimulating incremental demand (26% of Alexa-device owners use Alexa to purchase items from Amazon “Very” or “Somewhat Often.”) A potential 4th Pillar, indeed!
Update #4: PT Increased To $1,000 Based On Forwarding Valuation Framework To 2018 – Our new $1,000 PT (from $840) is based on a blended average of EV/“Economic” EBITDA, P/FCF, and GAAP P/E. We arrive at $1,000 by applying 18x Target Multiple on 2018E EBITDA of $26.9B, 20x Target Multiple on 2018E FCF of $29.1B, and 40x Target Multiple on 2018E GAAP EPS of $22.85.
Shares of Amazon.com closed at $769.69 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- RBC Capital Comments Ahead of eBay (EBAY) Q4 2016 Report, Says Traffic Trends Appear Robus
- Preferred Bank (PFBC) PT Raised to $65 at FBR Capital Following 4Q EPS Beat
- Western Digital (WDC): Gross Margin Expansion On The Horizon - RBC
Create E-mail Alert Related CategoriesAnalyst Comments, Analyst PT Change, Hot Comments
Related EntitiesRBC Capital, Mark Mahaney
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!