Amazon (AMZN) PT Raised to $950 at Mizuho Following Bullish U.S. Consumer Survey
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Mizuho Securities analyst Neil Doshi reiterated a Buy rating and boosted his price target on Amazon.com (NASDAQ: AMZN) to $950.00 (from $855.00) as their proprietary survey work shows that Amazon Prime is at an inflection point, and they believe this could drive increased revenue as consumers spend more on Amazon. Furthermore, Amazon's Alexa voice assistant + Echo devices could put Amazon at the center of home automation and be the next $11b+ revenue opportunity for Amazon.
The firm's first Amazon U.S. consumer survey showed:
1) Prime Inflection - over 50% of respondents are now Prime Members, and we estimate that Amazon has over 60m Prime Members in the US; Prime Members are more than twice as likely to shop 3x or more a month, and nearly twice as likely to spend more than $100 per order versus non-Prime members.
2) Solid Experience - ~95% of customers plan to spend the same or more in the future with Amazon, owing to convenience, low price and fast delivery.
3) New Prime Services - 20% are using Prime Now, and outside of 2-day shipping, Prime Video is the biggest benefit among Prime members (possible negative for Netflix).
4) Private Label - 38% indicated that they bought Amazon Private Label products, and 50%+ said they would by APL again -- Amazon can drive higher margins through PL goods.
"We believe that Amazon is reducing the friction from shopping online, and is in the best position to take out-sized secular offline-to-online retail share," Doshi said.
The firm's 2017 revenue goes up 1% to $167.6b as they layer some incremental revenue from the Echo. They also raised conservative CSOI estimates for '16 by 2% to $7.7b. '17 CSOI goes up by 10% to $12.1b.
Shares of Amazon.com closed at $804.70 yesterday.
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